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Nokia Reports Second Quarter Results
August 08, 1996
Strong Growth in Nokia Telecommunications, Nokia Mobile Phones Returns to Profit
Nokia Group net sales for April–June quarter totaled FIM 8 948 million. With comparable figures, net sales increased by 17% compared to the second quarter of 1995. Operating profit for April–June 1996 was FIM 825 million, 9.2% of net sales (FIM 1 670 million, 18.6% of net sales in April-June 1995). Profit before taxes and minority interest totaled FIM 728 million (FIM 1 670 million). The Group´s net profit totaled FIM 518 million (FIM 1 156 million).
Group profitability was affected by the results of operations of Nokia Mobile Phones. After a loss-making first quarter, the business group recorded a slight operating profit, but, as expected, stayed on a significantly lower profit level than in the corresponding period in 1995. In April-June, Nokia Mobile Phones´ net sales increased to FIM 4 910 million, 30% over the 1995 level (FIM 3 764 million).
Strong growth and good profitability continued at Nokia Telecommunications, which recorded a 23% increase in net sales to FIM 3 225 million (FIM 2 612 million in April-June 1995). At Nokia General Communications Products sales declined by 46% to FIM 979 million (FIM 1 806 million in April–June 1995) as a result of the sale of the Cable business in March 1996, the discontinuation of the television business at the end of 1995 and divestments of non-core businesses throughout 1995.
"Nokia´s net sales growth and operating profit developed positively from the first quarter of the year. We met targets set for the second quarter, while, as anticipated, profits stayed below their 1995 level," states Jorma Ollila, President and CEO.
According to Ollila, given the recent developments in the European television market, Nokia remains confident that its decision to divest its remaining television business was necessary. "Together with the divestment of the cable industry, Nokia will have its total focus in the manufacturing and marketing of mobile phones, GSM/DCS cellular networks, transmission and access networks with related equipment, digital multimedia equipment and other telecom related equipment," Ollila continues.
"Looking forward to the balance of the year in an increasingly competitive environment," Ollila concludes, "we expect Nokia Telecommunications to remain very competitive and to achieve strong growth and good profitability, and Nokia Mobile Phones to further improve over second quarter results. Overall, we maintain our generally positive outlook, but, as always, actual performance will depend on a variety of external factors, including overall development in our major market areas."
Nokia Group, headquartered in Helsinki, Finland is an international telecommunciations company with 1995 net sales of USD 8.4 billion. Nokia is Europe´s largest and the world´s second largest manufacturer of mobile phones, offering the most complete product range in GSM digital terminals, addressing to every major user segment. Nokia is a world leading supplier of GSM/DCS cellular networks and a significant supplier of advanced access networks, multimedia equipment and other telecom related products. Nokia employs 32 000 people worldwide. Nokia shares are traded in Helsinki, New York, London, Stockholm, Frankfurt and Paris.
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