Nokian Reports Record Car Tyre EBIT
Despite the fact that Nokian had already pre-announced its Q1 headline numbers, analysts have written of their surprise at the strength of the Finnish companies divisional breakdown figures. “Car Tyres reported EBIT of 41.6 euros, 13 per cent higher than we had assumed. The EBIT margin was hence 29.4 per cent, the second highest quarterly margin ever beaten only by the third quarter of 2004, which is a seasonally more important quarter,” Deutsche bank reported in an analytical report.
Growth in Nokian’s Russian operations are said to have been a main reason for the record margins. Nokian’s St Petersburg plant has been routinely praised by analysts who described it as generating significant cost efficiency improvements “on top of the very solid demand picture.”
As a result of the strong first quarter second half margins look set to beat the first quarter level. Networking capital stood at 400 million euros at end of the first quarter, up by 25 per cent year-on-year, in line with growth of 12 month rolling net sales. “We have raised our 2007 and 2008 earnings per share estimates by some 6-7 per cent and our target to 27 euros from 26,” the analysts continued.