Nokian's losses exceeded expectations
Nokian Tyres reported a much larger operating loss for the first quarter of 2025 than analysts had expected, and the company noted that there are uncertainties related to the tariff policy of US President Donald Trump. After the release of the quarterly report, Nokian's shares fell in price by more than 13%, according to Reuters.
In the first quarter of this year, Nokian's operating loss was €18.5 million (€15.1 million a year earlier), while analysts polled by the company expected the figure to be €4.6 million. At the same time, sales grew from €236.6 million to €269.5 million, and the forecast was slightly lower at €267.8 million.
According to Nokian's President and CEO, Paolo Pompei, sales grew in all segments in which the company operates, and thanks to improved product availability, the growth in the passenger car tire division was above market rates, allowing the manufacturer to strengthen its position in all regions. The Nokian Heavy Tyres division, which produces tires for trucks and special equipment, also increased sales and profitability, "despite the challenging market situation".
Pompei emphasized that "while we would like to maintain one of the best growth rates in the industry, it is necessary to increase the focus on improving profitability, which did not reach a satisfactory level in the first quarter", and the price increase implemented at the beginning of the year to compensate for growing raw material costs will be reflected in the results of the second and subsequent quarters of the year.
In March 2025, Nokian began shipping products manufactured at its new plant in Romania, which will gradually increase production, serving the markets of Central and Eastern Europe. At the same time, the company is expanding the capacity of its US facility, where the main focus is on increasing the production of all-season and off-road tires for North American consumers. "Of course, due to the situation with tariffs, there are uncertainties, but in the long term, we see excellent opportunities for growth in North America", Pompei noted.
In 2025, Nokian completed a three-year investment period, during which the company invested around €800 million in expanding its production capacity. By the end of the year, the company plans to increase sales and operating profitability, and given that Nokian traditionally has a strong position in the winter tire market, the company expects an increase in profits in the second half of the year.