Business results of joint stock company Ericsson Nikola Tesla in first nine months 2013

“We can be satisfied with the results achieved during this year, including also our successful performance in Q3. Operating profit increased by 20.4%, while net profit increased by 14.8% YoY. Gross margin grew to 17%, primarily due to a more favorable product/service mix. Return on sales increased to 11.2 %. Total cash balances, including current financial assets, amounted to MHRK 470.3. A solid cash flow from operating activities amounted to MHRK 70.4. The Company’s balance sheet remains strong with total assets of MHRK 1,013.8 and equity ratio of 62.6%," commented Gordana Kovačević, the president of Ericsson Nikola Tesla.

“A positive trend in sales revenue was recorded in almost all markets, with export amounting to 75%. In the domestic market, the telecom operators continued to invest in electronic communications, primarily due to implementation of new technologies. Operators’ revenue growth mainly comes from Internet broadband access services and TV media distribution, while the expected decrease was recorded in the area of traditional fixed-line telephone services. The negative financial situation of fixed network alternative operators has no impact on Ericsson Nikola Tesla’s performance due to company’s minor exposure towards these customers. In the neighboring markets, a significant increase in sales revenue was achieved, where, among other things, we signed a strategic OSS/BSS contract. In CIS market, the Company has been successfully repositioned in order to adjust to challenging and demanding market environment. Ericsson market keeps showing a positive trend. The R&D Center continues to expand its portfolio and responsibilities at the global level. Sales revenue achieved from R&D activities in advanced radio network segments, platforms and fixed network servers as well as from other expert centers’ activities account for 44% of total sales revenue.

We work intensively on strategic growth plans for the period until 2016, taking into account all market potentials and risks. In the period to come, we shall try to strengthen our position in the strategic business segments (4G/LTE, OSS/BSS, TV media distribution, services) in collaboration with key customers and partners. Our efforts remain focused on profitable growth, cost reduction, increased efficiency and cash flow. Moreover, we are aware of the fact that only organizations/teams and experts who are innovative, motivated and committed to common goals may ensure successful performance and competitiveness in the future.

Although economic uncertainty and business challenges in 2013 are still present, the company is well positioned to continue with providing support to its customers and partners in the transforming ICT market,” concluded Gordana Kovačević.

Communications Ericsson Nikola Tesla