Friday. 24.05.2024

Finnish mobile network provider Nokia withdrew from business in Russia on Tuesday, as European businesses continue to drop their activities in the country due to Moscow's war on neighbouring Ukraine and resulting sanctions.

Nokia has suspended shipments, halted new business and transferred its limited research and development activities out of Russia over the past few weeks, Nokia said.

The move does not affect the company's outlook for 2022 as a whole as Nokia's Russian business makes up less than 2% of net group sales while demand remains strong in other regions, the company said.

However, Nokia's exit from Russia will lead to a provision of about €100 million ($108 million) in the first quarter which will affect reported figures but not those that are comparable.

Nokia chief Pekka Lundmark has so far calculated sales of €22.6 billion to €23.8 billion for 2022 while adjusted operating profit is expected to be 11% to 13.5% of the sum. In 2021, Nokia reported an operating margin of 12.5% on a comparable basis with sales of €22.2 billion although the company also benefited from one-off effects from venture capital investments.

Other businesses

Meanwhile German electronics retailer Ceconomy is looking for solutions for its Russian investment in M.video due to the war.

"We are currently examining various options," boss Karsten Wildberger told an extraordinary general meeting in Düsseldorf on Tuesday. Ceconomy holds 15% of the Russian electronics retailer. "Access to the shares and the exercise of our rights from them is significantly restricted."

Wildberger said Ceconomy's business was not itself directly affected by the war. "We are not represented in Ukraine and have not been operational in Russia since 2018." However, he highlighted macroeconomic consequences such as higher energy prices and rising inflation.

He added that the crisis in Eastern Europe was also causing uncertainty among consumers, a trend that Ceconomy was also feeling.

Nokia leaves Russia citing Moscow's war on Ukraine