Nokia sees 'challenging' 2024 after profits plunge

HELSINKI - Finnish telecommunications equipment maker Nokia warned Thursday that it expects another tough economic environment in the first half of this year after its net profit sank in 2023.

Nokia and its Swedish rival Ericsson have launched cost-cutting programmes as their customers have reduced spending amid a slowing global economy.

The Finnish firm reported a profit of 679 million euros ($739-million) for last year, down 84 percent from 2022.

"In 2023 we saw a meaningful shift in customer behaviour impacting our industry driven by the macro-economic environment and high interest rates along with customer inventory digestion," Nokia chief executive Pekka Lundmark said in an earnings statement.

"We expect the challenging environment of 2023 to continue during the first half of 2024, particularly in the first quarter," he added.

Nokia reported an 11 percent drop in net sales last year to 22.26 billion euros, driven by a fall in investment by mobile network operators in North America.

The results were also affected by a slowdown in the deployment of 5G networks in India.

In the last quarter of 2023, its adjusted operating profit fell 27 percent to 846 million, but this was still higher than the 763 million euros expected by a group of analysts polled by Bloomberg.

Nokia said last year it could cut its workforce by up to 14,000 people, reducing costs by up to 1.2 billion euros by 2026.

The company also lost a battle with Ericsson for a $14 billion five-year contract with US company AT&T.