Nokia Oyj (ADR)(NYSE:NOK) Update On Dividend And Capital Structure


Nokia Oyj (ADR)(NYSE:NOK)‘s Board of Directors intends to propose a payout of EUR 0.19 per share for 2017. The payout is company’s primary way of distributing earnings to shareholders, and it targets to offer an earnings-based growing payout. Over the long term, the company targets to grow the payout by distributing around 40% to 70% of non-IFRS EPS, considering Nokia’s cash position and anticipated cash flow generation.

The details

On October 29, 2015, following Nokia’s Board of Directors performed a thorough assessment of company’s prospective long-term capital structure needs, the company reported a EUR 7 billion plan to enhance the efficiency of its capital structure. This plan comprises of around EUR 4 billion in shareholder distributions and around EUR 3 billion of de-leveraging.

As of the close of the third quarter 2017, around EUR 6.9 billion of company’s capital structure optimization plan had been completed. The remaining amount of around EUR 0.1 billion links to planned share repurchases, and is anticipated to be completed by the close of 2017. After the completion of this plan, and factoring in their targeted payout for 2017, Nokia is assured that it will have an efficient and strong capital structure.

Non-IFRS EPS were remarkable €0.09 compared to €0.04, a year earlier. Year-on-year group level presentation was good as well, with operating margin of 12.1% and gross margin at 42.7%. Results from patent licensing was impressive, leading absolute operating profit in Nokia up 73% from one year earlier. Networks witnessed a gross margin of 38.6%, an increase of 110 basis points from the comparable quarter in 2016.

Revenue surged on a constant currency mode in IP Routing, excluding video, by almost 4% year-on-year and jumped in Global Services by 2%. YoY revenue also showed growth was up in the Middle East and Africa and within Asia Pacific, and in Asia Pacific, the India market had another extremely robust quarter with sales growing by double-digits year-on-year.

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