Nokian Tyres Q1 2024 financial results

Nokian Tyres has released its financial results for the first quarter of 2024, showcasing a resilient performance despite several challenges. The company reported net sales of 236.6 million euros for the period spanning January to March 2024, largely unchanged from the 236.4 million euros in the same period last year. When adjusted for comparable currencies, net sales saw a modest increase of 1.4 per cent.

“The first quarter net sales and segments operating profit were at previous year’s level,” states Jukka Moisio, president and chief executive officer of Nokian Tyres. “The car and tyre market continues to be demanding due to economic uncertainties and low consumer confidence.”

However, segment operating profit experienced a slight dip, totalling -15.1 million euros compared to -14.1 million euros in Q1 2023. Similarly, overall operating profit for the quarter stood at -26.2 million euros, a decrease from -18.8 million euros in the previous year. It’s worth noting that -11.1 million euros was designated as non-IFRS exclusions, contributing to the overall figures.

Several external factors impacted Nokian Tyres’ performance during the quarter. The company cites the Red Sea crisis and political strikes in Finland as contributors to production losses, shipment delays, and escalated logistics expenses.

“Due to the strikes in February – April, we lost in total approximately three weeks of production in Passenger Car Tyres and one week in Heavy Tyres,” shares Moisio. “The negative financial impact of the political strikes and the Red Sea crisis is approximately 20 million euros in EBITDA, of which more than half in Q1.”

Earnings per share for Q1 2024 were reported at -0.18 euros, marking a significant improvement from -2.59 euros in the same quarter of the previous year. Despite the operational hurdles faced, the company managed to narrow its losses on a per-share basis. Additionally, cash flow from operating activities amounted to -87.3 million euros for the quarter, compared to -57.6 million euros in Q1 2023.

Guidance for 2024

In 2024, Nokian Tyres expects a significant growth in its net sales with comparable currencies and segments operating profit compared to the previous year. The company anticipates that tyre sell-in will grow during the year. “With our increasing capacity and competitive product portfolio, we are ready to seize this opportunity,” says Jukka Moisio.

“Due to seasonality, the sales growth and segments operating profit are expected to be generated in the second half of the year,” Moisio adds. “Our strong balance sheet enables us to both continue executing on our clear growth strategy toward 2 billion euros net sales with strong profits and reward our shareholders.”