Like many other companies, the Finnish network supplier Nokia wants to withdraw from the Russian market. In recent weeks, the company has suspended deliveries, halted new contracts and relocated its limited research and development activities outside of Russia, Nokia announced in Espoo on Tuesday. Swedish rival Ericsson announced on Monday that it would end its activities in Russia.
With the Russian operations representing less than two percent of the group’s net sales and strong demand in other regions, the outlook for the full year 2022 remains unchanged, Nokia said. However, the exit from Russia will lead to a provision of approximately EUR 100 million in the first quarter. This has consequences for the reported but not comparable financial figures.
For 2022, Nokia boss Pekka Lundmark has so far calculated a turnover of 22.6 to 23.8 billion euros. Adjusted operating income should be 11 to 13.5 percent. Nokia had achieved an operating margin of 12.5 percent on a comparable basis in 2021 with a turnover of 22.2 billion euros. However, the company also benefited from one-off effects from its venture capital investments, without which the margin would have been around 11 percent.
Ericsson closes business in Russia
Swedish network equipment supplier Ericsson had already announced on Monday that it would withdraw from its activities in Russia until further notice amid the war in Ukraine. All deliveries to customers in Russia were suspended at the end of February. Given the recent events and the EU sanctions, the affected customer activities in Russia will now be suspended indefinitely.
As a result of the withdrawal, Ericsson has made a provision of 900 million Swedish kronor (about 88 million euros) in the first quarter. Ericsson has about 600 employees in Russia. According to the company, they are now being sent on paid vacation. The Swedes are a major supplier to the largest mobile operator in Russia, MTS, and the fourth largest operator, Tele2.
Source: Krone
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