Nokian Tyres revises forecast – sales, operating profit to decline
Due to a weaker economic forecast for Russia and the CIS, Nokian Tyres has downgraded its guidance for 2014 and now says net sales and operating profit will decline this year compared with 2013. This latest forecast replaces that published on 7 February, in which Nokian Tyres said it was positioned to show growth in net sales and operating profit this year.
The rouble has lost approximately six per cent of its value in the last 90 days and its devaluation has hurt Russia’s economy and the purchasing power of Russian consumers. Nokian says this has weakened demand for tyres, and the company will not be able to fully compensate for this through the competitive advantage the weaker rouble offers its Russian manufacturing operations. Some 55 per cent of the tyres Nokian produces in Russia are exported and paid for in euros.
Nokian Tyres estimates growth in all its other key markets – the Nordic region, Central Europe and North America – this year. Raw materials are estimated to provide a tailwind of approximately €30 million in 2014, supporting profitability.
The Finnish tyre maker will publish its interim report for the January to March 2014 quarter on 7 May 2014.