October 30, 2019 / 1:18 PM / 16 days ago

UPDATE 1-Finnish tyre maker Nokian falls short of profit expectations

(Adds CEO comments, background)

Oct 30 (Reuters) - Finnish tyre maker Nokian Renkaat reported worse than expected third-quarter operating profit on Wednesday, hit by soft demand that prompted a profit warning last week.

Operating profit was down 21% year on year at 67.5 million euros ($75 million), below an average forecast of 78.6 million euros in a Refinitiv poll of analysts..

The Finnish company had warned that 2019 sales and profit would be lower than previously forecast as it feels the effects of weakness in several markets.

“Net sales in passenger car tyres decreased as the car and tyre market in Europe continued to be soft,” Chief Executive Hille Korhonen said in a statement, adding that higher material and expansion costs had also hurt profitability.

“In Russia, the market has turned weak, which is a clear change compared with expectations at the beginning of the year.”

Korhonen added that the company expects its markets to remain weak in 2020.

Last month Nokian said European distributors were holding back from buying costly winter tyres because of high inventories and that sales volumes are likely to remain subdued throughout Central Europe for the rest of the year.

Third-quarter sales were virtually flat year on year at 357.3 million euros, in line with the average forecast of 358 million euros.

Shares in the company were down 1.4% at 1245 GMT. ($1 = 0.8998 euros) (Reporting by Anne Kauranen and Tarmo Virki Editing by David Goodman)

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