Highlights
- Orders booked 1,062.4 MHRK
- Sales revenue 700.6 MHRK
- Gross margin 17.8%,
- Operating profit 61.6 MHRK
- Profit before financial cost and income tax expense (EBIT) 81.7 MHRK
- Net profit 65.3 MHRK
- Earnings per share 49.5 HRK
- Return on sales before tax 11.7%
- Cash flow from operating activities – 18.7 MHRK
Performance
„The performance of Ericsson Nikola Tesla in the first half of 2007 is characterized by stability and business growth. The company’s operations in export markets contributed as usual to the company’s overall performance. We are present in markets with high potential for ICT services, products and solutions, and I believe we shall be able to maintain a long-term profitability and market position, providing, however, that we understand our customers’ needs and their business opportunities. We are also aware of the fact that a continuation of the stable operational trend in an increasingly competitive environment requires positioning in new strategic areas, in new markets and with new customers. In that sense I am very pleased that we have signed a couple of strategic agreements as a foundation to achieve our goals. Here I would like to point out agreements with Megafon Russia and Ipko Net Llc in Kosovo.
I would also like to add that Ericsson Nikola Tesla promotes the principles of sustainable development and corporate social responsibility and thus creates the prerequisites for better operations, higher productivity and efficient resource utilization”, pointed out Gordana Kovačević, company president.
In comparison with the first half of 2006, Ericsson Nikola Tesla performed as follows.
Orders booked increased by 7.8%, while sales revenue increased by 13.6%, resulting from higher business volume in almost all major markets.
In domestic market sales revenue increased by 6.9%, amounting to 255.3 MHRK.
Excellent results were achieved in Bosnia and Herzegovina and in Montenegro where sales revenue increased by 90% to 116.4 MHRK.
In the CIS market sales revenues went down 8.7%, primarily due to changes in the realization of contracts in Kazakhstan and Belarus, and it amounted to 125.4 MHRK. However, the high level of orders booked, mainly owing to the Belarus agreement and the collaboration with new customers, should contribute to sales growth till year’s end.
The company achieved very good results in the internal Ericsson market. The sales revenue increased by 16.4% to 203.5 MHRK.
Financial indicators – profitability
Profit before financial cost and income tax expense (EBIT) is 8% lower compared to the same period previous year, primarily owing to extraordinary income relating to the fire damages (36,6 MHRK) in 2006. If we compared the operations disregarding this extraordinary income in the previous year, EBIT would actually indicate growth of as much as 56.5%.
Gross margin is on the last-year level (17.8% compared to 17.6% in the first half of 2006).
Despite the higher interest income and smaller negative foreign exchange differences, the lower result from financial activities were influenced by considerably lower depreciation of reserves for Impairment receivables (collection).
Net income is 6.3% lower compared to the net income achieved in the first half of 2006 and amounts to 65.3 MHRK.
Return on sales before tax is 11.7% (1H 2006: 14.1%).
The company liquidity is still very good although during the first half of 2007 considerable funds were invested into the equipment to be implemented within the contract on our export markets. Also, a dividend of 320 HRK per share was paid, amounting to total of 423.7 MHRK.
Major deals and agreements in key markets
Over the last three months Ericsson Nikola Tesla continued its successful performance in domestic and export markets.
In the reported period the good collaboration with domestic customers Vipnet, T-HT and Tele2 continued. The company also performed well in the enterprise systems area. In May 2007 the company signed an agreement for the development and implementation of a Land Information System (consisting of united Land Records and Cadastral System), to be performed in 2 years. This agreement, signed with the Ministry of Justice and the National Geodetic Administration, should secure modern and regulated real estate transactions in the Republic of Croatia.
In CIS market the collaboration with our new customer, Megafon, one of the top three GSM operators in Russia, needs to be pointed out. With this operator the company concluded a delivery contract for a fixed transit network based on Ericsson’s AXE system. Beside this strategically important contract, several agreements were also signed with customers in Russia, Moldova and Kazakhstan for fixed telephony systems and enterprise systems solutions.
The company also achieved a great export success with a new customer, Ipko Net Llc, the second mobile operator in Kosovo. In collaboration with Ericsson Nikola Tesla they started a new GSM network that should soon cover the entire Kosovo region.
It is an investment project starting from scratch („green field“investment) and is a continuation of a concession agreement concluded in March 2007 between the Kosovo Telecommunication Agency and a consortium of Telekom Slovenija, Mobitel and Ipko Net. The agreement includes the delivery, implementation and operation of GSM communication and transmission system and all related services.
In the internal Ericsson market the company continued its activities in Research & Development and other expert centers. At the same time Ericsson Nikola Tesla’s specialists for total communication solutions have been increasingly engaged in different projects conducted by Ericsson’s Market Units.
Communications Ericsson Nikola Tesla
