Russia exit pushes Nokian Tyres to surprise Q4 loss, shares drop 11%
HELSINKI Feb 7 (Reuters) - Finland's Nokian Tyres (TYRES.HE) posted a surprise fourth-quarter operating loss on Tuesday after its supply of passenger car tyres dropped sharply with the loss of its Russian output which accounted for the bulk of production.
The company's shares were 11% lower on the Helsinki stock exchange following the release of the earnings report.
Following the invasion of Ukraine, Nokian agreed in October to sell the Russian plant where it made 80% of its passenger car tyres, but it has not been able to sufficiently ramp up production elsewhere.
"The first half of the year will be demanding as we are lacking supply, but we expect our volumes to start picking up again from the second half of 2023," Chief Executive Jukka Moisio said in a statement.
Nokian reported an operating loss of 13.5 million euros ($14.5 million) in the fourth quarter, down from a profit of 53 million a year earlier and missing by a wide margin an average analyst forecast of a 22.1 million profit in a company-provided poll.
The figures included 27 million euros worth of one-off costs: 6.8 million related to a U.S. factory ramp-up, 16 million linked to its exit from Russia and 4.2 million in other impairments and write-downs.
Net sales fell 19.8% year on year to 411.3 million euros and by more than 22% in comparable currencies, the company said.
Nokian expects 2023 net sales of between 1.3 billion and 1.5 billion euros with an operating profit margin of 6%-8%.
The company in November announced plans to invest 650 million euros in a new passenger car tyre factory in Romania to replace some of the lost output from its Russian operation, which it agreed to sell to local oil producer Tatneft PJSC (TATN.MM) for 400 million euros. However, there remains substantial uncertainty over the closing of the deal.
Chinese Qingdao Sentury Tire (002984.SZ) will also start tyre production for Nokian as a subcontractor, to replace some of the lost output from Russia, the Finnish company said in December.
($1 = 0.9342 euros)
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