Nokia: maintained outlook for the year
Nokia reported strong results but did not revise its outlook for 2021, which set at 7-10% target for operating margin – rising to 10-13% in FY2023 – and positive free cash flow. Nokia's net sales target for FY21 is €20.6 billion to €21.8 billion.
President and CEO Pekka Lundmark said: "At this point we are maintaining our Outlook for the full year, as we want to see how 2021 continues to develop. The solid first quarter provides a good foundation for achieving the higher end of the 7 to 10% comparable operating margin range. We expect our typical quarterly earnings seasonality to be less pronounced in 2021, and we continue to monitor overall market developments including visibility for semiconductor availability. I am proud of how we have continued to successfully deliver to our customers during the global semiconductor shortage."
In Q1 Nokia saw net sales increase 9% year-on-year, driven by strong growth in network infrastructure and solid growth in mobile networks. Reported net sales increased 3%.
In the enterprise segment, Nokia gained 63 new customers, more than doubling the number added in Q1 2020. Reported net sales increased 14% and there was double-digit sales growth in North America.
Growth in 5G saw the comparable gross margin reach 38.2% and, reporting a "solid liquidity position", net cash stands at €3.7 billion and total cash at €8.8 billion.
Lundmark commented: "Today’s results demonstrate that we are on track to deliver on our three-phased plan to achieve sustainable, profitable growth and technology leadership as announced at our recent Capital Markets Day.
Qualcomm Incorporated: scaled to meet demand
With revenues of US$7.9 billion, Qualcomm Incorporated saw a 52% jump compared to its Q2 last year, which it said was the result of scaling manufacturing to meet growing demand.
Net income for the quarter reached $1.76 billion, up 276%. QCT – which develops and supplies integrated circuits and system software based on 3G/4G/5G and other technologies – saw a 53% jump in handset revenues ($4 billion for the quarter), a 71% jump in IoT, ($1.2 billion), and growth of 39% in RF front end. Snapdragon Modem-RF Systems have now been selected by seven handset manufacturers for their commercial 5G smartphones. Automotive saw an increase of 40%.
“Demonstrating the strength of our strategy and our success in execution, we delivered another quarter of year-over-year growth driven by sustained demand for smartphones globally and our ability to increase the scale of our non-handset revenues,” said outgoing CEO Steve Mollenkopf.
“Looking ahead, Qualcomm is well positioned for continued growth, and we remain confident in our ability to execute on the many opportunities in front of us. I am extremely honoured and proud to have led Qualcomm for the past seven years and am confident in the Company’s ability to extend its position as a leader in wireless technologies under Cristiano’s leadership," he added.
Cristiano Amon takes over as CEO from 30 June.
Huawei: another challenging year
In Q1, Huawei saw revenue decrease 16.5% year on year due to declines in the consumer business, in part as a result of selling Honor in November. However, the network business maintained steady growth.
The net profit margin increased 3.8 percentage points year-on-year at 11.1%, boosted by patent royalty income of US$600 million and "ongoing efforts to improve quality of operations and management efficiency".
Eric Xu, Huawei's rotating chairman said: "2021 will be another challenging year for us, but it's also the year that our future development strategy will begin to take shape.
Thanking customers and partners, Xu continued: "As always, we remain committed to technological innovation and investing heavily in R&D as we work to address supply continuity challenges caused by restrictions in the market.
"We will continue making breakthroughs in basic science and pushing the frontiers of technology."
Ooredoo: FX impacts and Myanmar politics weigh on revenues
Ooredoo Group saw a marginal revenue decline of 1% due to negative foreign exchange impact. Excluding this and "despite the Covid-19 pandemic", growth in Qatar and in Indonesia saw revenues increase by 1%.
Group net profit attributable to Ooredoo shareholders decreased by 50% year-on-year to QAR 193 million in Q1 2021, again due to FX impact from Myanmar with an FX Loss in Q1 2021 versus an FX Gain in Q1 2020. Excluding the FX impact the net profit increased by 120%.
Data revenues account for more than 55% of total revenue driven by data leadership and digital transformation initiatives across the group's operations.
The potential merger of Ooredoo's Indonesia business with CK Hutchison's is still on the cards, with the MoU extended to 30 June. On this, the firm said: "This extension will provide more time to complete the ongoing due diligence and negotiate the final terms of a possible combination of the entities". Further, chairman Sheikh Faisal Bin Thani Al Thani said the firm made "good progress" in transitioning to its asset light model following the recent sale of 4,200 towers to Digital Colony.
HE Sheikh Faisal Bin Thani Al Thani, chairman of Ooredoo, said: “Ooredoo Group delivered a robust set of results during the first quarter of 2021 despite challenging market conditions across many of our territories. We remained focused on our digital transformation agenda which has enabled us to create value for our customers by offering a seamless and convenient user experience as well as optimise our cost base by streamlining and automating processes."
Market by market, Ooredoo Qatar saw revenue growth of 0.6% year-on-year to QAR 1.8 billion, with total customer numbers now at three million. In Oman, competition in the pre-paid segment and the pandemic pushed revenues down 4% to QAR610 million, while the customer base increased by 2% to reach 2.9 million in Q1 2021. A "softening macroeconomic environment" in Kuwait saw revenues decline 8% to QAR607 million and a customer base of 2.4 million, down 100,000 on last year.
In Iraq the 17% devaluation of the Dinar saw Asiacell revenues drop from QAR1 billion in Q1 last year to QAR852 million this year with the customer base down 100,000.
The political situation in Myanmar contributed to a profit decline of 11% year on year, with revenues at of QAR252 million during the first quarter of 2021. However, things fared much better in Indonesia where Indosat Ooredoo’s revenue increased by 13% to QAR1.9 billion compared to the same period last year. Growth was driven by the strong performance in cellular revenues supported by a rebound in the enterprise business.
Ooredoo Algeria saw revenues increase 2% and an EBITDA margin of 34% has been maintained. Ooredoo Tunisia reported revenues of QAR394 million in Q1 2021, an increase of 3% compared to the same period in the previous year supported by favourable FX trends, however a change in how mobile subscriber data is analysed saw the customer base decline by 2.3 million.
On this, the company said: "Ooredoo Tunisia changed the reporting of its prepaid customer’s base from the original life-cycle definition to the 90 days network activity definition, to align with the standard reporting methodology used in Tunisia. As a result, Ooredoo Tunisia’s reported customer base declined by approximately 2.3 million to 6.9 million customers in Q1 2021. There is no impact on the reported financials."
VEON Ltd: acceleration in revenue
VEON Ltd, which now has more than 23 million monthly active users across all products, noted an "acceleration" in group revenue, which reached the upper end of the firm's guidance following a 4.35% year on year growth. This followed growth of 1.4% in the previous quarter.
Beeline Russia reported full quarter growth, with Q1 revenues up 1.4% YoY with one less trading day, while in aggregate reporting Ukraine, Kazakhstan and Pakistan saw revenue growth of 13.4% year on year, beating their inflation rate.
However, reported revenues declined 5.1% due to currency headwinds and, further group EBITDA declined 4.9% YoY due to adverse currency movements. This result was driven by Ukraine (+15.3%), Kazakhstan (+12.4%) and Pakistan (+8.1%). In Russia, the business reported a YoY decline in local currency EBITDA of 4.8%, a marked improvement over the -11.9% YoY EBITDA reported in 4Q20.
“Our digital platforms have continued to perform strongly in the period, with some good milestones across our JazzCash business in particular," said Sergi Herrero, who is to step down as co-CEO, effective 30 June 2021.
"I remain excited about the longer-term prospects for our digital businesses across our various operations. In the quarter we have seen Kazakhstan, Ukraine and Pakistan return towards their historic trend growth levels, with double-digit growth in local currency terms. I expect see ongoing positive momentum from these markets in the coming quarter. Cost efficiency across the operations remains a key focus in our new decentralised model, which is positive for shareholder value going forward as we continue to optimise our operations. It has been a pleasure working together with Kaan over the past 18 months as co-CEO of the company.”
For more Q1 results, click here.
