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Saturday, February 4, 2023

Nokia (NYSE: NOK) Decides to Stop Doing Business in Russia

Nokia (NYSE: NOK) confirmed that it has decided to exit the Russian market. The company disclosed that over the last weeks it has stopped suspended deliveries, halt new business, and is shifting its limited R&D activities out of Russia. As the company confirmed an exit from the Russian market, it also disclosed that its priority continues to be the safety and well-being of its employees.

In terms of the financial implications of the decision, in 2021, Russia contributed less than 2% of its net sales. It does not anticipate this decision to have an impact on its ability to meet its 2022 outlook published in the Nokia financial report for Q4 and full-year 2021 announced on 3 February 2022, given the robust demand it sees in other regions. It anticipates a provision of around €100 million in Q1 as a result of this decision, which will affect its stated but non-comparable financials.

Western countries have expressed alarm about the prospect of crucial telecommunication network infrastructure in Russia failing for humanitarian reasons. They’ve also underlined the significance of maintaining the flow of information and access to the internet, which allows Russians to see the world from a different perspective.

As a result, as Nokia exited, it wants to provide the required support to sustain the networks, and it is working on obtaining the appropriate licenses to provide this support while remaining compliant with current penalties. Hundreds of foreign companies are cutting ties with Russia after its Feb. 24 invasion of Ukraine and after Western sanctions against Moscow.

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