In her statement about the company's business results in Q3 2024, Gordana Kovačević, President of Ericsson Nikola Tesla, highlighted: “In the first nine months of 2024, in line with our strategy, we continued with the implementation of many projects in the domestic and export markets and achieved sales revenue amounting to EUR 168.1 million. Total sales revenue decreased by 18.4% YoY, primarily due to lower sales revenue in the domestic market in Managed Services segment, caused by the contract expiration with Hrvatski Telekom which was completed at the end of last year. For comparable units, if we exclude revenue from Managed Services with Hrvatski Telekom, the total sales revenue increased by 6% YoY, which indicates the continuation of stable business performance. Our strategy to strengthen business operations in export markets and in new business segments has been showing results. Sales revenue in the operator segment in the export markets and the Digital Society segment recorded growth and, together with the continuously stable business performance in Ericsson market, partially offset the decline in sales revenue in the domestic market in the operator segment.
 

Talking about financial indicators, gross profit amounted to EUR 22.3 million, down by 22.5% YoY, mainly due to lower sales revenue in the domestic market in the operator segment, and business mix. Gross margin was 13.3% (first nine months of 2023: 14.0%). Operating profit amounted to EUR 17.9 million, down by 27.5% YoY, primarily as a result of lower sales revenue and gross profit. We concluded the end of Q3 with a solid balance sheet and an equity ratio of 39.7%. Cash and cash equivalents, including the short-term financial assets, amounted to EUR 54.8 million, which accounts for 33.8% of the total assets. In line with our expectations, a positive cash flow from operating activities was realized in the amount of EUR 1.2 million (first nine months of 2023: EUR -2.4 million).
 

During the third quarter, we continued quality cooperation with our partners, the leading operators on the domestic market, on the extension and modernization of telecom networks. For us, the success of our customers is confirmation of our expertise and dedication in creating and implementing the latest technological solutions. Our strategic partnership with Hrvatski Telekom (HT) in the radio part of mobile network, has certainly contributed that Hrvatski Telekom once again, for the sixth year in a row, wins the Ookla® Speedtest Awards™ for the fastest mobile network and the best mobile coverage in Croatia. With our strategic partner A1 Hrvatska, that celebrates 25 years of successful business performance this year, we have achieved many significant joint steps forward in the application of state-of-the-art technological solutions. Currently, our activities continue on the extension of coverage and capacity of the 5G radio network, as well as on the modernization and construction of the convergent core network. In the Digital Society segment in the domestic market, we would like to highlight new contracts related to the green borders monitoring system, and the maintenance of the Joint Information System of Land Registry and Cadaster. With the City of Osijek the contract was signed on the development and implementation of the single and comprehensive City web and mobile app in which our consortium partner is A1 Hrvatska. 
 

As we have previously commented, our strong focus is on strengthening business operations in export markets. During Q3, we continued intense activities on the modernization and expansion of network capacity with the Kosovo operators IPKO and Telekom Kosova, as well as HT Mostar (Bosnia and Herzegovina) and Crnogorski Telekom (Montenegro). We are pleased that the pre-sales activities in the Digital Society segment resulted in the signing of a contract with the company Logicom Solutions from Cyprus on the replacement of the land administration information system of the Department of Lands and Surveys of the Republic of Cyprus.
 

We have further strengthened our strategic partnership cooperation with Ericsson by gaining new assignments in R&D and Services.  As already announced, our R&D Center gained new responsibilities for the development of 5G Radio Access Network (RAN). Gaining these responsibilities is important because it will enable us to build additional E2E capability within networks software/modules. In order to achieve this goal, the focus remains on efficient deliveries of high-quality software, agile organization and continuous improvement and optimization in the way of working. Our teams in the Services segment have also gained additional responsibilities for the development of software tools for mobile networks management and optimization.
 

In the past weeks, there was a lot of talk about the CEZIH system considering that, among other things, due to activities on system modernization, there were difficulties in using certain features. Due to obsolete infrastructure, it was necessary to migrate the CEZIH system with the accompanying data to new technological infrastructure, which is an extremely demanding technical process because of different hardware and software components, numerous functionalities and a large number of stakeholders. As well as on other tasks where our experts are engaged, both on activities related to maintenance and CEZIH modernization, we are doing everything we can to fulfill the responsibilities we have taken over, timely and with quality, in line with the contractual obligations. 
 

Our focus remains on profitability, cost and operational efficiency, cash flow from operating activities and responsible risk management. We are working intensely to secure stable business performance by implementing a strategy focused on strengthening the leading position in mobile networks, growth in the Digital Society segment through intensified pre-sales activities and activities related to the expansion of our portfolio, business diversification in services and R&D segment, as well as continuous improvement of our position in the segments of services and R&D for Ericsson. Our investments continue in new business segments and customers, the development of ICT solutions based on the latest technologies, our employees' competencies and digital transformation of Ericsson Nikola Tesla Group. Furthermore, we have been working on a stronger application of Artificial Intelligence (AI) in creating new business opportunities and increasing internal efficiency.
 

In November we will celebrate 75 years of Ericsson Nikola Tesla doing business, and we will present our new visual identity. We are proud of our company that, thanks to technology leadership, strong innovative capacity and competent employees, has successfully adapted to numerous market and technological changes over the years.“