Nokia’s Irish arm sees pre-tax profits rise 32%

PRE-TAX profits at the Irish arm of mobile phone giant Nokia increased by 32% to €6.3 million last year.

Accounts filed to the Companies’ Office show that Nokia Ireland recorded the increase in pre-tax profits in spite of revenues dropping 18.8%, from €246.1m to €199.8m in the 12 months to the end of December.

The Finnish-owned company confirmed that the €199.8m in revenues was secured solely through the sale of mobile phone handsets in Ireland last year.

According to the directors of Nokia Ireland, “the level of business for the financial year was in line with expectations given the current economic environment”.

They state that “market penetration currently stands at 118% and it is evident that the company is in a replacement market”.

“To facilitate future growth, the directors are confident that with the continued development of Nokia smart phone devices and further consideration of the currant product portfolio, the company will be able to improve on its 2010 results.”

The company’s operating profit increased by 34% last year, from €4.7m to €6.3m.

The filings show that last year, the company’s cost of sales decreased by 19% from €231m to €187m, with administrative expenses reducing from €9.4m to €4.9m, and distribution expenses increasing from €796,000 to €1.2m.

The company had accumulated profits of €12.6m at the end of 2010.

The directors state: “The company operates in an operator-controlled market. Throughout 2010, operators reduced the level of subsidies on devices. There is a risk operator subsidies continuing to be eroded in 2011.”

The company’s staff costs fell from €1.8m to €1.4m last year.

In April, Nokia announced the implementation steps towards achieving a new strategy with Microsoft and a note states that “Nokia Ireland operations will continue as normal with a new Windows phone scheduled for some time during 2012”.

The company has been losing out in the smartphone market and earlier this year announced “a new global strategy aimed at regaining Nokia’s smartphone leadership”.

Last year, the mobile phone giant recorded global net sales of €42.4 billion, with an operating profit of €2.1bn. Nokia employs 132,427 employees in 120 countries.