Finnish kit vendor Nokia’s profits for the first quarter of 2022 clocked in at €219 million, down from €263 million YoY thanks mainly to Russia, but the firm says it is still on track to hit its yearly targets.

There were some mildly positive data points in Nokia’s Q1 financials, but the standout figure was the 17% drop in profit, clocking in at €219 million down from €263 YoY. Ongoing supply chain issues were cited as one pain point for Nokia, but the report stressed the withdrawal from the Russian market, for which it made a €104 million provision earlier this month. Since these factors were presumably already priced in, the profit drop doesn’t seem to have raised any alarms from investors as the share price has stayed relatively flat upon the news.

Elsewhere it was a mixed bag – Q1 net sales grew 5%, and network Infrastructure was a standout positive, growing by 9% apparently driven by strong demand in fixed and submarine networks. Mobile Networks declined 4% due to apparent supply chain constraints, and Nokia Technologies declined 17% ‘as licenses that expired in 2021 have not yet renewed.’

“Network Infrastructure delivered again strong growth with continued robust momentum in both Fixed and Submarine Networks,” said Pekka Lundmark, CEO of Nokia. “In Mobile Networks supply constraints hindered our revenue growth, nevertheless we expect to return to growth this year due to our improved competitiveness. Our 5G Core business continued to drive good growth in Cloud and Network Services.

“Overall, Q1 was a strong start for the year both in terms of net sales and profitability. The demand environment remains strong and while supply chain and inflation challenges remain, we are confident we can deliver our 2022 outlook and continue to make good progress towards our long-term targets.”

In terms of the Russian withdrawal earlier this month, Lundmark said: “During the first quarter of the year, we were shocked to see the Russian invasion of Ukraine. Nokia believes in human rights, international co-operation and the rule of law. Throughout the war our priority has been the safety and wellbeing of our people. We support our employees in Ukraine in multiple ways and are proud of their continued efforts to maintain our customers’ networks in the country.

“It has been clear for us since the early days of the invasion that continuing our presence in Russia would not be possible. We announced in early April that we will exit the Russian market in a responsible way and aim to provide the necessary support to maintain our customers’ networks, as we exit.”

When Nokia announced earlier this month that it was pulling out of Russia following its invasion of Ukraine, it stipulated that the region accounted for less than 2% of its net sales in 2021, and this should not stop it hitting its 2022 financial projections. “We expect this decision to lead to a provision in Q1 of approximately €100m which will impact our reported but not comparable financials,” said a report at the time.

Despite the profit drop registered for Q1, Nokia maintains its projections for 2022 (it announced revenue expectations in the range of €22.6-€23.8 billion for the year in its end of year financials) are on track:  ‘Nokia’s long-term targets as published with our fourth quarter 2021 results remain unchanged,’ said the report today.