OREANDA-NEWS. May 14, 2010. In February 2010, Nizhnekamskshina’s management announced a plan to boost 2010 productive output by 6% y-o-y. Judging from the company’s 4M 2010 operating figures, this projection has an excellent chance to be realized.

In January-April 2010, Nizhnekamskshina upsized car tire output by 44.3% y-o-y to 3.4 mn. More specifically, the company produced 2.3 mn passenger car tires (68% of total output), up 146% y-o-y, and 1 million truck tires (30% of total output), up 140% y-o-y.

The news is very positive for the company. As we wrote in a daily comment published on February 18 2010, growth in productive output is the key driver for Nizhnekamskshina, as it should enable the company to finally return to profitability after two detrimental years (2008-2009). In February 2010, management set a target production growth rate for 2010 at 6% y-o-y. Judging from the 4M2010 operating data, management’s forecast has an excellent chance to be realized.

In line with Nizhnekamskshina’s recently published 1Q2010 RAS financial report, in January-March, the company earned a RUB 95 mn operating income, up 26% y-o-y, and a RUB 6.7 mn net income, in contrast with a RUB 400,000 loss a year earlier. The only negative factor is that the company’s relationships with its largest vendor and shareholder, Tatneft, are still based upon a tolling scheme.