Nokia Corp. reported solid financial results for the first eight months of 1994, particularly in its telecommunications and mobile phone divisions, with net sales increasing 54 percent and 62 percent, respectively.
Accounting for structural changes within the group, as well as fluctuating exchange rates, the January-August period yielded nearly $3.57 billion in net sales, up 40 percent from $2.42 billion the same period last year. Net profits skyrocketed 612 percent to $327.5 million from $46 million for 1993’s corresponding period.
Operating profit for the eight months was $404 million, compared to $134.6 million; pre-tax profit rose to $448.4 million from $79.7 million.
Nokia raised its share capital by a maximum of 6 million preferred shares, directing its share issue primarily at international investors. A total of $490 million in new capital has been raised. Nokia’s preferred shares were listed on the New York Stock Exchange, where trading began on July 1. Also, the company’s board of directors approved a proposal to convert common shares to preferred shares. To date, more than 3 million shares have been converted.
“The positive development of the first four months of the year intensified during the second four-month period,” said Jorma Ollila, Nokia president and chief executive officer. “Nokia Telecommunications and Nokia Mobile Phones results for the first eight months were good.”
Net sales in the Nokia Telecommunications division for the period were $827.9 million, a noteworthy gain from $536.7 million last year. Much of this success is credited to recent agreements to deliver telecommunications equipment and systems around the world, the company said. “The explosive growth of the world’s cellular phone markets requires Nokia to continuously augment its production capacity.”
Global System for Mobile communications digital cellular networks were constructed in Beijing, the Baltic state of Latvia and St. Petersburg, Russia. Sweden’s telecom operator Tele2 will receive Nokia’s Intelligent Network systems and DX 200 digital switching exchanges. Germany was equipped with the first phase of the DCS 1800 Personal Communications Network. Singapore Telecom will receive transmission equipment to expand its telecom network in a deal valued at $8.8 million. And British Nynex CableComms signed a deal valued at $176.4 million designating Nokia to provide telecommunications network systems.
Nokia achieved significant market growth in the Mobile Phones sector as well, with net sales for the January-August period totalling $1.18 billion, up from $721.6 million for the corresponding period last year, the strongest growth in the second half of the term.
This growth is a result of vigorous expansion of digital networks, particularly GSM, and an increase in the number of private consumers in many analog networks, according to Nokia. Also, Nokia began selling cellular phones and other products to Japan in May and introduced its Cellular Data Card to Europe.
Net sales for Nokia’s Cables and Machinery and Consumer and Industrial Electronics groups varied little from 1993.
