NOKIA, Finland (Aug. 13, 2004) — Nokian Tyres P.L.C. posted double-digit gains in both earnings and sales in the first half of 2004, prompting the firm to forecast improved sales and earnings for the whole year.
Nokian credited strong sales in the U.S.—up 50 percent—Russia and the Nordic countries for a 29.1-percent increase in manufacturing-related revenues during the period; the company's distribution network posted lower gains.
Operating earnings of $36.2 million were 76.6 percent ahead of a year earlier, while sales advanced 18.9 percent to $307.7 million. As a result, the earnings/sales ratio improved nearly two full points to 11.7 percent. Net earnings in the half rose 144 percent to $24.5 million
The company attributed its improved profits to price increases, an improved sales mix and better productivity than in the previous year.
Nokian indicated the results could have been even better, stating that raw material prices increased from the previous year, and the low value of the dollar had a negative effect on the profitability of tires sold in the U.S.
Nokian cited increased demand for high-speed summer and winter tires, forestry and special tractor tires and tread rubber from Nordic retreaders.
The company said it broke ground in June on a $64 million plant in Russia that will be turning out 1.5 million car tires a year by 2006.