FIH Mobile saw its revenues for 2018 grow 23.6 percent to USD 14.9 billion, while the net loss widened to USD 857 million from USD 525 million in 2017. The phone manufacturer said it benefited from growing sales of Nokia-brand phones under its deal with HMD Global, but margins remained poor on the Nokia devices and it was forced to write off goodwill from the investment. Losses are expected to continue in 2019, but the operating loss in H1 should be smaller than a year earlier due to cost-cutting efforts.
FIH said the Nokia business was hit by the general weakness in the smartphone market in the second half of 2018, while the company also works to scale volumes and prices to cover the costs of manufacturing. In an effort to improve the situation, FIH Mobile shut down at the end of 2018 its TNS distribution business for the Nokia devices, and HMD Global has started working with another ODM, in addition to FIH. While this is expected to lead to lower revenues from HMD in 2019, margins should improve.
Helping to offset the difficulties with the Nokia business, FIH Mobile said it was growing sales from a "US-based internet company", which entered its top-five customers in 2018. The unnamed customer "is one of the most innovative internet companies in the world to bring the most advanced AI technology-embedded smart phones to customers and consumers worldwide", FIH Mobile said. The top five customers, including HMD Global, accounted for 86.6 percent of FIH's revenues in 2018.
Asia remains the biggest part of FIH Mobile's business, and sales there grew 14.9 percent to USD 11.8 billion in 2018. Growth was driven by assembly for Chinese smartphone makers, as well as growing manufacturing in India, where FIH Mobile said it benefited from the strong growth of sales by an unnamed Chinese smartphone maker. Sales in India were up 48.5 percent in 2018, also helped by the start of Nokia manufacturing there.
