Nokian sales, earnings up double-digits in Q3, nine months

NOKIA, Finland — Nokian Tyres P.L.C. reported strong growth in both sales and profits over the three months and nine months ended Sept. 30, helped by higher volumes and price adjustments.

Third quarter operating profit was up 39.8% at $114.3 million on 26.8% higher sales of $523 million, Nokian reported. Net income was $81.5 million.

Over the first nine months of the year, operating profit grew 115.3% to $279.2 million, on 33.4% higher sales of $1.42 billion. Net income improved by a factor of five to $199.4 million.

Nokian President and CEO Jukka Moisio linked the company's "significant" profit growth to "early timing of deliveries" and higher sales volume.

As anticipated, increased raw-materials and logistics costs, including the shortage of container capacity, were visible in the third quarter, he added.

"We have taken mitigating actions, including price increases, to reduce the impact of cost inflation," Mr. Moisio said. "We have announced further prices increases in a wide range of markets and products, and we will continue to carefully control costs, as cost inflation is expected to continue."

To meet demand, Nokian operated its factory in Vsevolozhsk, Russia, and heavy tires factory in Finland at full capacity during the third quarter.

In the U.S., Nokian said it continued to ramp-up production at its Dayton, Tenn., factory to reach an output of around 1 million tires in 2021.

The company also recently disclosed plans to operate passenger tire manufacturing at its headquarters plant in on a 24/7 basis to support an increase in output.

For the full year this year, Nokian said it expects sales and operating profit to "grow significantly" versus 2020. "The global car and tire demand is expected to pick up, but the Covid-19 pandemic continues to cause uncertainties for the development," it added.

During the January-September period, Nokian reported double-digit growth in both its consumer and commercial sectors, while the Vianor retail tire/auto service business — comprising 175 points of sale throughout Finland, Sweden and Norway — posted a gain of just 4.1%.

The company also posted double-digit gains in all of geographic regions, including 40% growth in the Americas, to $197.2 million. As such, the Americas region accounts for 14% of Nokian's global sales revenue, up slightly versus 2020.

Looking ahead, Nokian said its mid-term goal is to reach $2.35 billion (2 billion euros) in sales, based on organic growth ahead of the market and increasing market share in all key markets.

The company is basing its mid-term growth strategy on the firm's competitive strengths, including high-quality products and a premium brand, effective supply chain and leadership in sustainability. The company has launched a record number of new products in 2020–2021 and will continue to accelerate innovation to strengthen its competitiveness and unique positioning in the premium tire segment further.