HELSINKI, Finland (Feb. 5, 2015) — Nokian Tyres P.L.C. suffered double-digit drops in operating income in the fourth quarter and fiscal year ended Dec. 31 on the combined negative effects of falling oil prices and the weakening Russian and CIS currencies and economies.
The drops could have been worse, however, according to Nokian President and CEO Ari Lehtoranta, but the company was able to counteract some of the negatives by strengthened market positioning, which allowed for improved operational efficiences, and higher-than-estimated raw materials cost reductions.
Fourth quarter operating profit fell 16.9 percent to $102.9 million on 7.7-percent lower sales of $504.6 million. Full year operating income was down 19.9 percent to $410 million on 8.7-percent lower sales of $1.84 billion. Net income was up 13.4 percent to $276.8 million.
Business in North America grew 16.8 percent in 2014 to $168 million, or 9.1 percent of global sales.
“The drastic oil price drop combined with further weakening of Russian and CIS currencies and economies had a negative impact on our sales and thus on our financial performance,” Mr. Lehtoranta said.
“Even if the market development visibility in Russia and CIS is very poor at the moment, we remain confident about our future. We start 2015 with a strong balance sheet, better than ever product range, constantly expanding distribution and a well performing organization.”
For 2015, Nokian expects that, with stable exchange rates, net sales and operating profit will decline slightly from 2014. First quarter operating profit will be significantly below last year, as a delayed start of winter tire sales in Russia will result in sales shifting to the following quarters, the company said.