Nokia’s Irish unit slips into the red as revenues down €10.6m

Turnover at Nokia’s Irish subsidiary declined sharply last year as the company fell into the red, according to newly filed accounts.

Nokia (Ireland) Limited attributed the drop in sales to a lack of new product and increased competition from mobile manufacturers.

The Finnish firm's mobile business was acquired by Microsoft for over $7 billion in September 2013. Last year Microsoft sold the unit on to Foxconn for $350 million in a deal that will see the Taiwanese technology group work with HMD, a newly created Finnish company led by former senior Nokia and Microsoft telecoms executives.

In 2015, Nokia’s Irish subsidiary marketed and sold devices based on Microsoft’s technology. Apart from the latest change of ownership, it faces possible competition from the rump Nokia business, which is tipped to return to developing smartphones and tablets under its own name in 2017 following the ending of a non-compete clause.

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The latest accounts show turnover fell by €10.6 million in 2015 to €13.4 million as the company reported a pretax loss of €58,000 versus a €612,000 profit in 2014.

Portfolio clipped

“Turnover for the next financial year is not expected to show any significant difference since the company has cut its portfolio at the lower end of the market and, with the highly competitive high-end market and brand loyalty of consumers to other providers, the business expects that sales will remain steady,” the firm’s directors said.

“Operating results have declined sharply in the year, resulting in an operating loss of €61,000 in 2015. There is also the impact of decreasing sales margin while operating expenditure is more or less consistent with the same business activities, which is a contributing factor to the declining operating profit.”

Nokia said the Irish mobile device market continued to be “very competitive and dynamic.”

The accounts indicate Nokia had net current assets totalling €4.76 million and cash of €8.86 million at the end of December 2015.

Staff costs were significantly lower in 2015, as Nokia Ireland staff transferred to Microsoft's Irish subsidiary at the start of the year.

Overall, staff costs totalled €34,000 last year, which consisted of a bonus paid to employees. In the previous year staff costs, including wages and salaries, totalled €1.3 million.