Moody Downgrades Nokia Rating – Nokia RespondsAugust 23, 2013 No Comments
This morning, Moody’s Investors Service cut and downgraded Nokia’s rating and put it ‘four levels below investment grade’.
“We believe that the company continues to face challenges returning to sustainable profitability in its core smartphone and mobile-phone operations,” said Roberto Pozzi, Moody’s analyst for Nokia. “It is unlikely to reach break-even on a cash flow basis before well into 2014, at the earliest.”
Nokia quickly replied with the following press release:
Espoo, Finland – Timo Ihamuotila, Nokia’s Executive Vice President and CFO, comments on today’s rating decision from Moody’s:
“We are pleased that the strong cash position we have maintained throughout our transition has enabled us to take advantage of an opportunity to acquire full ownership of NSN, whose financial performance has strengthened markedly in recent quarters. In Devices & Services, we are pleased with the Lumia volume growth we delivered in the first half of this year and are looking forward to driving further share gains for the ecosystem. With these efforts our target is to return our Devices & Services business to sustainable cash generation as soon as possible.”
At the end of the second quarter 2013 and prior to the closing of the NSN transaction, Nokia Group had gross cash of EUR 9.5 billion and net cash of EUR 4.1 billion.
Nokia notes that it also has access to additional liquidity via a revolving credit facility of EUR 1.5 billion, which is entirely undrawn and available to the company through March 2016. Nokia Siemens Networks also has a EUR 750 million revolving credit facility that is entirely undrawn and available through June 2015.
Further information on Nokia’s debt instruments can be found in the company’s Q2 2013 Interim Report issued on July 18, 2013.
Nokia recently launched their remarkable Lumia 1020 with a 41MP camera and rumors are swirling around about a phablet and a Windows RT tablet. Also most recently we have seen Nokia take to the skies as Delta has outfitted all their flight attendandts with Lumia 820′s. I wouldn’t call Nokia out by a long shot…