Dubai: Finnish phone manufacturer Nokia posted huge full-year losses due to a number of "one-time" financial restructuring activities, the company's chief executive officer said yesterday.
Stephen Elop, speaking to reporters in Dubai, said Nokia's bottom line was impacted by a number of elements including the closure of a factory and the revaluation of assets.
Nokia posted a net loss of €1.2 billion (Dh5.76 billion) for 2011 against a net profit of €1.8 billion a year earlier. The company saw a net loss of €1.07 billion in the fourth quarter as sales of its new Windows Phones failed to dent the dominance of Apple's iPhone or Google's Android.
"On a fully reported basis, there are losses, but what drove those losses was principally a number of financial restructuring activities over the last year; there are one-time activities such as the closing of a factory, the restructuring of the workforce or the revaluation of assets," Elop said. "In the fourth quarter our devices and services business was profitable on an operating basis. However, because of these restructuring elements it shows our bottom line as a loss. In terms of the Middle East and North Africa, we have a very strong market share in these regions."
He added: "We are facing competitive challenges as we go through this transition and that is why we announced a strategy change back in February [2011]. There is pressure on market share so we need to introduce new products and implement these changes in order to take us forward."
Market struggle
Nokia's share price has fallen more than 60 per cent on the Helsinki Stock Exchange in the last two years. In October last year, Nokia introduced its Lumia 800 smartphone, its first device using Microsoft Windows software, in a bid to claw back market share in a segment dominated by Google and Apple.
"Everything we do from a strategy perspective is designed to drive long-term value for the company. We make sure we have inspired employees who are building award-winning products that delight consumers and are hopefully well-sold and executed in the field," Elop said.
"It is a difficult series of steps to go through when you have to change the strategy of a company, but we are going through that change in recognition of the challenges [we face] and to build a healthier company," he added.
Elop also quashed continuing speculation that Nokia's partnership with Microsoft could lead to a takeover by the US technology group.
"On one hand we are a publicly traded company so people can buy our shares. I know sometimes there are rumours about Microsoft [mounting a takeover bid] but we have been very clear there is absolutely no foundation whatsoever to those rumours."
No firm mideast plans
Nokia does not have any specific plans to roll out its first Windows smartphones in the Middle East.
The manufacturer's Lumia smartphones are based on Microsoft's new Windows Phone 7.5 operating system and form a third ecosystem in a competitive market dominated by Google and Apple.
"We have not announced specific country-by-country plans for throughout the Middle East. When we launch into a country or region, we have to get all the conditions correct including having the developers on board and the correct language variants," said Stephen Elop, Nokia's chief executive officer. "The dynamic of three different ecosystems is something to think about. The Middle East and Africa plays an important role because it is an area, relative to other regions, where we have a strong market share position," he added.
