The Finnish tyre maker had predicted that 2019 profit and sales would be weaker than earlier estimation as it feels the consequences of a deficiency in several markets
Finnish tyre maker, Nokian Renkaat on Wednesday has announced a very poor third-quarter operating profit, which is even worse than the anticipated profit. The operating profit is impacted by low demand that indicated a profit alert last week. Talking about the exact figures, the operating profit was down 21 per cent at 67.5 million euros ($75 million) year on year. Moreover, it is below average prediction of 78.6 million euros in a Refinitiv survey of analysts.
The Finnish tyre maker had predicted that 2019 profit and sales would be weaker than earlier estimation as it feels the consequences of a deficiency in several markets. Hille Korhonen, Chief Executive, said in a statement “Net sales in passenger car tyres decreased as the car and tyre market in Europe continued to be soft. In Russia, the market has turned weak, which is a clear change compared with expectations at the beginning of the year.”
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According to him, the culprits behind the falling sales figures are expansion and higher material costs. He also added that the brand is anticipating its sales to remain low in 2020 as well. Last month, the leading tyremaker stated that the European distributors were not willing to purchase high-priced winter tyres because of huge inventories and the fact that sales measures are likely to stay subdued for the rest of the year throughout Central Europe.
In addition to that, sales for the third quarter were flat at 357.3 million euros year on year as the average prediction of the Finnish tyre manufacturer was 358 million euros.