Finnish telecoms giant Nokia on Thursday reported a solid profit increase in 2021 and issued a confident outlook for the coming years as sales increased despite supply issues.
“I would like to call this a year of transformation,” CEO Pekka Lundmark told reporters after the group posted a net profit of 1.6 billion euros (around Rs 13,520 crore), driven by an increase in 1.6% of sales to 22.2 billion euros (about Rs. 1,87,596 crore).
The results follow a series of surprising quarterly results for the networking equipment maker, which slowed in the race for the 5G networking equipment market against Sweden’s Ericsson and China’s Huawei.
Since taking office in 2019, Lundmark has overseen an extensive program of restructuring and cost reduction, with savings invested in the development of new, more competitive products.
The measures are widely considered to have paid off, with Nokia forecasting a comparable operating margin of between 11 and 13.5% for 2022, after 12.5% in 2021.
Lundmark has so far been cautious about publicly offering longer-term guidance, but said on Thursday the group hopes to grow its operating margin above 14% over the next three to five years. .
The increased cash flow also meant Nokia would reinstate dividends, which had been suspended in October 2019.
“The board is proposing a dividend of EUR 0.08 (approx. 7 rupees) per share for 2021 and we are also launching a share buyback program to return up to 600 million euros (approx. rupees) over two years,” Lundmark said.
Lundmark said the semiconductor shortage and global supply chain lockdowns have “stabilized” but the situation “remains tense”.
He said expected improvements in the second half of 2022 “won’t help this year overall yet”, but that 2023 should be “very different”.