Mika Koskinen
Nokia’s failure additionally in networks could be a nasty setback for the complete Finnish economic system, writes Iltalehten’s Mika Koskinen.
The state funding firm Solidium grew to become a significant proprietor of Nokia in March 2018. Solidium purchased a 3.3 p.c stake in Nokia in an enormous deal value 844 million euros. Inventory buying and selling continued in smaller tons. Solidium is now Nokia’s largest proprietor with a 5.8 p.c stake.
Within the spring of 2018, hopes had been excessive.
– We now have adopted Nokia for fairly a very long time, tried to check and analysis, and we grew to become fairly satisfied that it is going to be a great funding. The corporate is the market chief in an fascinating market of 130 billion euros, and it’s a large know-how firm in any case, Solidium’s CEO Antti Mäkinen justified the deal to Iltalehte on the identical day (IL 13.3.2018) when the large deal came about.
Solidium’s mission is to strengthen and stabilize home possession and improve the worth of its holdings in the long run. The funding in Nokia has not met no less than the latter aim.
Between 2018 and 2023, Solidium has put a complete of about 1.38 billion euros of taxpayers’ cash into Nokia. Solidium has paid a median of round EUR 4.21 for its Nokia shares. The calculated alternate price loss is greater than 250 million euros thus far.
The image of a failed funding shouldn’t be improved by the truth that the dividends paid by Nokia have been slightly modest – no dividends had been paid in any respect for the years 2020 and 2021 – nor by the truth that Solidium financed about half of its March 2018 big deal by promoting the shares of Sammo, which is thought for its beneficiant dividends and has maintained its worth.
Nokia’s weak share worth improvement has naturally additionally hit Finnish fairness savers. Nokia is our nation’s second hottest inventory. It has virtually 230,000 personal homeowners in Finland.
There may be additionally a whole lot of pension cash within the sport. The pension firms Ilmarinen, Varma, Elo and the State Pension Fund are among the many firm’s main homeowners.
Nokia introduced its April-June interim report on Thursday. The report confirms the picture of Nokia as a stagnant firm. Turnover and revenue clearly weakened, and there’s no cheering in sight.
It is no surprise that growth-hungry traders have misplaced confidence within the firm. The worth curve has been trending downward since spring 2015. On Thursday, Nokia’s share fell 5 p.c to three.4 euros.
Like its Swedish competitor Ericsson, Nokia is now affected by a nasty market state of affairs, however that doesn’t clarify all of Nokia’s issues. Nokia was anticipated to reap the largest profit from Western boycotts of China’s Huawei’s 5G networks. That did not occur.
Nokia’s large drawback is that the corporate has not been capable of develop merchandise that it might promote with a great margin to its clients, not despite the fact that the corporate spends greater than 4 billion euros yearly on analysis and product improvement.
For a very long time, Nokia has made a big a part of its income from its cellular phone-related patents, which it licenses to cell phone producers. In April–June, patents introduced greater than half of Nokia’s working revenue.
Outdated, extremely productive patents are in fact an important factor, however on the identical time it offers a nasty picture of the present experience of an organization specializing in community tools.
CEO of Nokia Pekka Lundmark advised Kauppalehti in an interview on Thursday that final yr Nokia acquired patents for greater than 2,300 new innovations, for instance in optical networks and 6G.
Lundmark assured in the identical interview that Nokia’s product competitiveness is ok, the corporate is decreasing its value stage, and that any more the revenue will begin coming, so long as gross sales enhance.
It’s good to hope that Lundmark’s phrases will maintain. Nokia remains to be Finland’s main know-how firm, despite the fact that its nice days had been within the 90s and the start of the present millennium. Nokia’s failure additionally within the networks could be a nasty setback for the complete Finnish economic system.
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