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The company says the weak result is due to the coronavirus pandemic and the measures taken to clear the abundant stocks in the Russian distribution channel. NEWSPAPER / VESA MOILANEN
Nokian Tires’ operating profit collapsed to a deficit of EUR 23 million in April-June, compared to 94 million on the positive side at the same time last year. Over the same period, net sales decreased by 35% to EUR 271 million from EUR 416 million.
The company says the weak result is due to the coronavirus pandemic and the measures taken to clear the abundant stocks in the Russian distribution channel.
In the Passenger Car Tires business unit, the majority of the decrease in net sales and profit occurred: net sales almost halved from EUR 297 million to EUR 164 million, and operating profit fell from EUR 85 million to EUR 14 million.
“Despite the exceptional situation, our strategy and short-term priorities are clear: we offer customers top-class products and services while keeping costs under tight control and protecting cash flow by reducing investments, actively managing working capital and postponing projects,” says Jukka Moisio, CEO.
According to Moisio, the company’s balance sheet is strong and operating cash flow turned positive in the second quarter as inventory levels were reduced through production shutdowns to manage cash flow.