The Finland-based tyre manufacturer Nokian Tyres made a 22.8-million-euro (26.9-million-U.S. dollar) loss in the second quarter (Q2) of 2020, compared to the operating profit of 98.8 million euros in Q2 of 2019, said the company in its financial report on Tuesday.
Net sales of Nokian Tyres were 270.7 million euros in Q2, down from 415.7 million euros year-on-year in 2019, amounting to a 31.9-percent drop with comparable currencies, according to the report. Its net sales of the first half (H1) were 550.5 million euros, down 25.0 percent from 756.1 million euros a year before. The loss in the H1 was 13.7 million euros, compared to the 148.0-million-euro operating profit in the same period of last year.
Jukka Moisio, President and CEO of the company, said in a press release that Nokian Tyres’ Q2 results were strongly impacted by the COVID-19 pandemic. “While the wide-ranging restrictions have been necessary for health and safety reasons, lockdowns have led to a sharp drop in the global car and tire demand,” he explained. However, he said cash flow of Nokian Tyres from operations turned positive in Q2 as production was cut to reduce inventory levels.
But “given the continuous uncertainties,” the company refrained from giving a guidance for 2020. Finnish business daily Kauppalehti noted the loss in Q2 was a third smaller than analyst consensus had predicted. Headquartered in the town of Nokia, southwest Finland, Nokian Tyres is a famous manufacturer of tyres for cars, trucks, buses, and heavy-duty equipment. Known for its winter tyres, Nokian Tyres has production in Finland, Russia and the U.S. The turnover of Nokian Tyres in 2019 was 1.6 billion euros.