NOKIA will omit a dividend for the first time in at least 143 years as the struggling Finnish cellphone maker retains cash for its comeback attempt.
The company announced the decision as it reported its first net income in seven quarters and an increase in net cash, sending its shares higher. Even the world wars and the breakup of the Soviet Union, a major buyer of Nokia’s networking gear, did not stop the firm returning cash to investors.
Nokia is trying to claw back business after sales plunged and combined losses had reached almost e5 billion (R60bn) since early 2011. Chief executive Stephen Elop has cut more than 20 000 jobs and is conserving cash to challenge Apple and Google with devices running Microsoft software.
The dividend omission “is a very important step because it shows management is conscious of the work ahead”, Natixis Securities analyst Eric Beaudet said. – Bloomberg