UPDATE 2-Nokian Renkaat profits beat forecasts
* Q1 operating profit 105 mln euros, vs 92.7 mln in poll
* Sees 2012 sales, op. profit increasing
* Shares rise some 2 pct (Adds shares, analyst, capacity increase plans, competitors)
By Terhi Kinnunen
HELSINKI, May 9 (Reuters) - Finnish winter tyre maker Nokian Renkaat reported a bigger-than-expected rise in quarterly profit thanks to strong growth in Russia and said it expected full-year profit and sales to increase.
The Finnish firm has in the past seven years increased production in Russia where production is cheaper than in Finland and focused on more profitable winter tyres, helping it to outperform its peers.
"We got a flying start also for 2012 as both sales and production output improved clearly. Sales improved in all our markets with growth in Russia again outshining other areas," chief executive Kim Gran said on Wednesday.
First-quarter operating profit rose 45 percent to 105 million euros ($136.5 million), compared with a forecast for 92.7 million in a Reuters analyst poll.
Sales grew 33 percent to 384 million euros, against a forecast for 369 million. Sales in Russia rose 67 percent to 171.5 million euros.
The company reiterated it saw rising sales and falling fixed costs boosting its full-year operating profit, but added high winter tyre stocks in Central Europe were causing some uncertainty over the second half of the year.
"Q1 numbers were very strong and somewhat over the consensus," said Swedbank analyst Tomi Tiilola, adding that the comments on Central European stocks raised questions over whether all the new production coming online could be absorbed.
Nokian Renkaat is building a new plant in Vsevolozhsk, Russia, next to its old plant, and its annual production capacity in Russia is estimated to increase to 14 million tyres this year from 11 million. The firm exports some 50 percent of the tyres it makes in Russia.
Last month competitor Goodyear Tire & Rubber Co reported lower-than-expected quarterly sales and warned that it would sell fewer tyres this year as it focuses on higher-margin products.
Meanwhile Michelin said strong sales of specialty tyres offset weaker demand in Europe.
Nokian Renkaat stock was 1.9 percent higher by 0733 GMT after rising some 5 percent in early trading. In the past 12 months shares in Nokian Renkaat have risen around 7 percent, while the STOXX Europe 600 Automobiles & Parts index has fallen some 13 percent. ($1 = 0.7695 euro) (Editing by Dan Lalor and Helen Massy-Beresford)
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