Siemens takes hit on Nokia venture but holds on

German conglomerate Siemens appears keen to hold onto its stake in the Nokia Siemens Networks joint venture, despite previously expressing concern about its potential.

On Thursday, Siemens’ equity Investment unit posted a loss of Eur11m in the quarter to end September 30, compared to a Eur75m gain in the same period a year earlier.

The loss was due largely to NSN, which became part of Siemens Equity results following its formation in the previous quarter.

Restructuring and integration programs resulted in charges totalling Eur86m at NSN and Siemens incurred an equity investment loss of Eur58m. In the current year, NSN took Eur991m in charges, including Eur646m in severance pay. As a result, Siemens’ equity investment income related to NSN was a loss of Eur429m for fiscal 2007, the company said.

Nokia Siemens Networks, which has only been in operation since April this year, did not get off to a good start. On the day of its launch, the Finnish-German joint venture warned of a slowdown of spending in the market and said it only expects “very slight” market growth for the mobile and fixed infrastructure and related services market this year.

Siemens confirmed to telecoms.com that at a recent event, Siemens CEO Peter Loescher, commented on “the weak and therefore unsatisfying operating performance of the joint venture“.

The assessment seems a bit one sided though, as Finnish parent Nokia recently turned in Q3 results for 2007 that were 85 per cent up, year on year.

Nevertheless, reports suggest that Siemens is willing to stick it out, a bit longer at least. Rumour has it that a board meeting is planned for November 28, after which more details are expected to be revealed about Siemens future in the joint venture.

The company is also understood to have found a buyer for its troubled enterprise communications unit, although the German firm is keeping schtum on the details at present.