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Nokiaīs net sales for January-March FIM 7.9 billion, operating profit FIM 512 million
May 09, 1996
The Nokia Groupīs net sales for January-March 1996 totaled FIM 7 931 million. With comparable figures, net sales increased by 11% compared to the first quarter of 1995.
Operating profit (IAS) for January-March decreased by 62% and totaled FIM 512 million (FIM 1 340 million in the corresponding period in 1995). Profit before taxes and minority interest totaled FIM 399 million (FIM 1 351 million). The Groupīs net profit for the period totaled FIM 324 million (FIM 1 453 million). Capital expenditures amounted to FIM 471 million (FIM 637 million), and the average number of personnel for the period was 32 178 (29 374).
Strong growth continued at Nokia Telecommunications which recorded a 39% increase in net sales over the comparable period last year. Nokia Mobile Phones experienced moderating growth, recording an increase in net sales of 10% compared to January-March in 1995. Nokia General Communications Productsī sales declined by 5% over the comparable period in the prior year as a result of the discontinuation of the television business at the end of 1995 as well as the divestment of non-core businesses throughout 1995. The television business was reported as a discontinued operation in 1995, and the result of these operations should not affect the Groupīs financial performance in 1996.
The weakness in the Nokia Groupīs first quarter results was due principally to the results of operations of Nokia Mobile Phones. The business group recorded a slight operating loss attributable to slower sales growth, price declines and logistical issues.
Nokia Telecomunications reported higher profitability than in the corresponding period last year, as the result of continuous strong growth and good margins. Geographically, Nokia strengthened its position in each of its major market regions. In the United States, Nokia received its first order for a complete PCS 1900 system in March.
Excluding the impacts of the structural changes in Nokia General Communications Products, the profitability of the business group was slightly lower than in 1995.
"As forecast, Nokiaīs net sales and operating profit in the first quarter were significantly lower than the exceptionally high results received in the comparable period in 1995. This was due principally to the problems in the operations of Nokia Mobile Phones. We expect Nokia Telecommunications to continue to achieve strong growth and good profitability during the year, and the performance of Nokia Mobile Phones to gradually improve compared to the first quarter of the year", states Jorma Ollila, President and CEO in Nokiaīs January-March interim report.
"We maintain our forecast that profits in the first half of the year will be significantly below Nokiaīs performance in the same period of 1995. Our outlook for the second half of 1996 is positive but, as always, actual performance will depend on a variety of external factors, including overall developments in Nokiaīs major market areas."
Focusing in telecommunications, Nokia continued to rationalize its businesses. In March, Nokia sold its 55% in the Dutch cable company NKF. Following its decision to withdraw from the television business, in April Nokia announced the closing of its television production in Germany.
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