HELSINKI (Reuters) -Finland’s Nokian Tyres on Friday reported a sharp fall in operating profit for the second quarter, sending its shares down 8%, though it expects the second half of the year to be stronger as winter tyre sales pick up.
The company reported a second-quarter operating profit of 9.5 million euros ($10.57 million) compared to a year-earlier profit of 46.9 million euros, adjusted from an initially reported loss due to the impact of its withdrawal from Russia.
“The car and tire market environment is demanding, and during the quarter, we also faced some currency headwinds, impacting our net sales negatively,” Chief Executive Jukka Moisio said in a statement.
The exit from Russia has led to Nokian losing 80% of its annual passenger car tyre production capacity with the company now focused on sourcing from China and ramping up production at existing Finnish and U.S. sites.
A Nokian investor relations manager said the company had concluded its withdrawal from Russia in March this year so no longer included the business in its figures for the first half of 2023 and the comparable period last year.
Quarterly net sales, excluding the impact from the exited Russian business, fell 11.8% to 293 million euros.
Nokian said in April it expects the end of the year to be profitable thanks to winter tyre demand and being able to sell outsourced products.
Hitting that goal would, however, need meaningful improvement on performance, JP Morgan analysts said in a note to clients.
($1 = 0.8991 euros)
(Reporting by Essi Lehto; Editing by Niklas Pollard, Jan Harvey, Elaine Hardcastle)
