Nokia hangs up on dividend to preserve cash

NOKIA returned to profit in the final quarter of 2012, as sales of its Lumia smartphones finally picked up.

However, the Finnish company said it would not be paying a dividend for the first time in over 20 years, as it struggles to preserve its cash pile.

Following a cost-cutting plan that saw tens of thousands of jobs go, Nokia reached a quarterly profit of €375m (£317m). This followed six successive quarters of losses that reached €1bn at times.

Nokia, which was overtaken by Samsung as the world’s biggest mobile phone maker by handsets sold after 14 years at the top, has struggled to establish itself among the elite smartphone manufacturers.

It abandoned development of its own Symbian software in favour of Microsoft’s Windows Phone operating system two years ago, but has failed to see meaningful sales of its Lumia smartphones until now.

As announced earlier in the month, the company sold 4.4m Lumias in the quarter – less than a tenth of the 47.8m iPhones Apple sold, but an encouraging improvement for Nokia.

Sales of its cheaper Asha phones also impressed, while a turnaround in Nokia Siemens Networks, its network equipment joint venture with Siemens, boosted the figures.

Shares in Nokia, which had doubled in value since July to hit a nine-month high, fell by 5.5 per cent on news of the dividend being abolished.

The annual dividend cost the firm €750m last year, around a sixth of its €4.4bn cash pile.