Nokia Ireland revenues continue to plummet

Revenues at the Irish arm of Nokia continued to tumble in 2012, further reducing to €56.2m.

In accounts filed by Nokia (Ireland) Ltd with the Companies Office for the year to Dec 31, 2012, revenues plummeted 37%, from €90m to €56.2m.

The figures show that the phone firm recorded a pre-tax profit of €447,000 in 2012, following a pre-tax loss of €1.65m in 2011.

The company achieved the return to profit as administrative expenses fell from €7.2m to €2.7m and the cost of sales fell from €84m to €52.5m.

However, the slide in revenues in 2012 continued the trend of recent years as the Finnish phone company struggled to compete with new offerings from Apple and Samsung.

An examination of Nokia Ireland’s accounts since 2008 show that the size of its business has fallen by 79% over the five years.

In 2008, the firm recorded revenues of €270.8m, reducing to €246.1m in 2009 and reducing further to €199.8m in 2010. In 2011, the company’s revenues suffered a massive decline, dropping by more than half or €109m to €90.1m.

Last year, Microsoft agreed to buy Nokia’s mobile phone business for €5.4bn. Some 32,000 Nokia employees are set to transfer to Microsoft early this year as part of the deal.

Nokia’s mobile phone business had a market capitalisation of €110bn in 2007.

The directors of Nokia Ireland state that no change in expected in the operations of the Irish unit as a result of the Microsoft deal.

The directors’ report for the Irish unit states that “the business has declined significantly for the financial year as a result of competition in the market and consumers having less spending power”.

The report states: “For the financial year 2012, the company’s net sales and profitability were negatively impacted by the increasing competing smartphone platforms relative to Nokia Symbian smartphones as the group embarked on a platform transition to Windows Phone, as well as our pricing actions due to the competitive environment in both the smartphone and mobile phone markets.

“As part of the transition, the company introduced new devices operating on the Windows ecosystem to the market during 2012. At the same time, sale of Symbian devices declined, which is consistent with the transition from one platform to another.”

The directors state that “the board has decided that the sale and distribution of mobile phone handset will continue through Nokia (Ireland) Ltd despite the decline reflected in overall sales”.

Numbers employed by Nokia (Ireland) Ltd in 2012 totalled four — down from 12 in 2011. In 2011, the company paid out €509,000 in redundancy costs. Staff costs totalled €935,000 in 2012.

The firm’s shareholder funds last year stood at €14.4m, which included €11.47m in accumulated profits.