Recently, Nokian Tyres announced its semi-annual report for 2022. Net sales from January to June 2022 increased by 18.5% to 898.6 million euros (about 6.17 billion yuan). Calculated in comparable currencies, net sales increased by 13.9%; however, the high sales still failed to drive up the profit of Nuoji in the first half of the year. From January to June, Nuoji’s operating profit loss was 143.5 million euros (about 985 million yuan), a year-on-year increase. Down 1.13 times.
The sharp decline in operating profit in the first half of the year is directly related to the many unstable factors that Nuoji encountered in the second quarter. The continued deterioration of the Russian-Ukrainian conflict made Nokian Tyre's sales performance in the second quarter experience a serious decline.
In fact, Nuoji’s profit performance in the first quarter of this year was very good, with adjusted operating income of 66.5 million euros and net profit of 59.3 million euros (about 407 million yuan). However, in the second quarter, Nuoji's net profit experienced an unimaginable decline - although net sales increased by 15.8% to 482.1 million euros (about 3.31 billion yuan); but operating profit was a loss of 202.8 million euros (about 3.31 billion yuan). 1.387 billion yuan), the profit fell by more than 1 times.
Such a huge profit decline is not only related to the decline in Russian production capacity and sales volume caused by the conflict between Russia and Ukraine, but also related to its raw material and logistics costs.
The financial report shows that the raw material cost and inbound logistics cost of the tire industry increased by 46% year-on-year in the first half of 2022, although Nuoji has also implemented a series of price increases to ease the cost pressure, offsetting the higher raw material and other costs. Inflation, but under the coercion of various unstable factors, Nuoji's operating profit has been hit a lot.
From the financial report, we see that in the second quarter of 2022, Nuoji's sales performance suffered "Waterloo"
In this regard, Jukka Moisio, President and Chief Executive Officer, stated that due to the war in Ukraine and the subsequent sanctions, Jeanno Kee's operations in the second quarter of 2022 are facing increasing challenges. In June 2022, as Nokia's operations in Russia became unsustainable, its board of directors decided to begin a controlled exit from Russia.
It is reported that Nokia is currently evaluating different options after it withdraws from Russian production capacity, and has in-depth discussions on factories that replace Russian production capacity. This means that in the future, Nokia will focus more on growth opportunities in other core markets.
At the same time, Jukka Moisio mentioned that the withdrawal from Russia will also have a significant impact on Nokia's financial performance in 2022 - the interruption of Russian tire supply will have an adverse impact on sales in the second half of 2022, especially in the Central European market. influences. To this end, Nuoji is actively making various efforts to ensure product supply. It is reported that on the one hand, Nokia is continuing to increase its production capacity in Finland and the United States; on the other hand, it is also continuing to invest in new supply capacity in Europe, which is also one of Nokia's crucial medium-term priorities.
According to Nokia’s financial report, from January to June 2022, the net sales of passenger car tires totaled 649.6 million euros (about 4.46 billion yuan), of which 73% (83%) of passenger car tires were manufactured in Russia. . Among them, winter tires accounted for 44% (50%), summer tires accounted for 35% (34%), and all-season tires accounted for 21% (16%).
However, it is worth noting that, starting in late June, Nuoji has begun to prepare for a controlled departure from Russia, and will continue to expand the production capacity of its factories in Finland and the United States, and announced an investment plan for new production capacity in Europe to achieve its The goal of diversification of production capacity.
In the commercial vehicle tire market, from January to June, Nokian Heavy's net sales totaled 140.4 million euros (about 964 million yuan), an increase of 15.7% in net sales. However, Nokia has stopped selling and distributing heavy-duty tires to Russia in the first quarter due to the war in Ukraine. However, due to increased sales and improved production efficiency, the operating profit of this business segment was 28.4 million euros (about 190 million yuan), an increase of 16.87% year-on-year.
Nokia pointed out in the earnings report that the war in Ukraine and the resulting sanctions have brought great uncertainty to the operation of Nokian Tyres. Therefore, it said in its full-year performance forecast for 2022 that Nokian Tyre's net sales are likely to decline or be the same as 2021, while its segment operating profit is expected to decline significantly compared to 2021.
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