Nokia’s Marking the First Profit in Two Quarters
The consolidated financial results for the April-June 2020 period announced by Nokia, a major Finnish telecommunications equipment company, were in the black with a final profit of 94 million euros (about 11.6 billion yen). A loss of 193 million euros was recorded in the same period of the previous year, marking the first profit in two quarters. Sales were down 11% year-on-year to EUR 5,092 million due to the spread of the new coronavirus, but profitability improved in the core business.
Demand for communication equipment is strong. As of the end of July, there were 83 commercial contracts with telecommunications companies around the world related to the next-generation communication standard “5G”, an increase of 13 from the end of April. The company says that many of the new Corona sales have been postponed. In Europe, there is a movement to remove Chinese Huawei technology from the communication network, which may be a tailwind.
Rajiv Sri CEO will retire and will be replaced by Pekka Lundmark, invited from a local electricity giant from August. He plans to increase orders for 5G in the growing market of China.
Huawei, Nokia, and Ericsson in Sweden hold a 80% share of the market for communication equipment such as base stations. The UK decided to remove Huawei from the 5G network in July, and France will also remove it. Telecom companies need to replace it with other companies’ products, which Nokia and Ericsson see as an opportunity.
5G, which will be the foundation of next-generation technologies such as autonomous driving, will be maintained around the world. According to the GSMA, an industry group of telecommunications companies, telecommunications companies around the world will invest $1.11 trillion in capital spending over the next five years. In June, NEC agreed with NTT to expand its telecommunications infrastructure globally, and participated in the order competition.
Nokia's Marking the First Profit in Two Quarters - /10
Nokia's April-June Surplus for the First Time in Two Quarters