Nokia will axe dividends for the first time in at least 20 years as the mobile-phone maker shores up cash to cushion a drop in sales.

The Finnish company, which paid €0.20 per share dividend in 2011, announced the decision as it unveiled its results for the fourth quarter and full-year 2012.

"To ensure strategic flexibility, the Nokia board of directors will propose that no dividend payment will be made for 2012," the group said in a statement.

Net sales of €8,041m were reported for the fourth quarter, an 11% decline quarter-on-quarter and 20% fall year-on-year. Full-year sales fell 22% to €30,176m.

The group's non-International Financial Reporting Standards (IFRS) earnings per share diluted remained unchanged at €0.06 for the quarter.

Nokia finished the year with net cash of €4,360m, down 22% from a year earlier.

The business has been working on its comeback attempt as it tries to set itself apart with new products including the Lumia smartphone and its HERE brand, a location and mapping service.

Nokia said Lumia unit sales rose to 4.4m in the fourth quarter.

While sales in devices and services were up 8.0% quarter-on-quarter, the operating margin non-IFRS was razor thin, down to 1.3% from 4.9% a year earlier.

Nokia Siemens Networks reported net sales of €3,988, up 14% quarter-on-quarter and up 5.0% year-on-year. However, full-year sales were down 2.0% to €13,779m.

Stephen Elop, Nokia Chief Executive Officer, said he was encouraged by the results as the group strengthened its net cash position by €800m, of which €650m was generated from Nokia Siemens Networks.

"We are very encouraged that our team's execution against our business strategy has started to translate into financial results," he said.

"While the first half of 2012 was difficult for Nokia Group, in (the fourth quarter) we strengthened our financial position, improved our underlying operating margin in devices and services, introduced the HERE brand to expand our mapping and location experiences, and drove record profitability in Nokia Siemens Networks."

He said the group would continue to improve product competitiveness, accelerate the way the company operates and manage costs effectively in order to improve performance and deliver value to shareholders.

Shares tumbled 4.50% to €3.33 at 12:51 Thursday.

The results come after rival, Apple, reported record sales but failed to meet market expectations. Revenues came in at a $54.5bn, less than the $55bn forecast by Wall Street, for the three months to December 29th last year.

RD

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