In the evaluation of Company performance, Gordana Kovačević, the President of Ericsson Nikola Tesla, stressed the following:
„Overall Ericsson Nikola Tesla results for the first nine months 2010 show a decrease in orders and sales year-over-year, but at the same time, an increase in Operating and Net profit of 172.5% and 30.3% respectively when excluding the impact of the MHRK 126.5 impairment of Kazakhstan receivables. This increase in Operating and Net profit primarily reflects favorable product mix and strong focus on operational and cost efficiency. Cash flow from operating activities of MHRK 343.0 was supplemented in the quarter by the collection of MHRK 149.9 of Kazakhstan receivables. At the quarter end, total cash including short-term financial assets amounted to MHRK 710.1.
Market conditions were characterized by mixed behavior as regards investment by operators and other customers. In our export markets we have achieved a considerable increase of orders booked, especially in Bosnia and Herzegovina and Belarus, largely offsetting the decline in orders booked in our domestic market. In Croatia as well as other countries in the region, orders are also impacted by state budget cuts and the postponement of strategic ICT projects. Overall sales revenues follows the trend described for Orders booked but is further negatively impacted by the industry component shortages and Ericsson supply chain bottlenecks, which according to our estimate account for approx. one third of year-over-year sales decline.
We continue with a strong focus on sales and marketing activities and the realization of key business deals and new business opportunities. We have continued with investments into strategic projects and new segments, having in mind future directions/trends in industry of information and communications technology and e-business. I would like to highlight activities in relation to transformation of existing networks into new generation networks and participation in preparations for the introduction of state-of-the-art technologies. We have witnessed the interest of operators in 4G of mobile communications systems, which will enable higher transmission rates, larger system capacities and richer services portfolio. The extension of mobile broadband access will enable the larger potential for ICT solutions implementation, like healthcare and public administration informatization.
During the last quarter, we have continued to adapt the organization, adjusting to new market and technology requirements, as well as the new organization models and responsibilities within Region Western Central Europe within the global Ericsson organization. Ericsson Nikola Tesla aims to be integrated into all vital processes taking place within the Ericsson corporation and at the same time maintain responsibility for those segments of business and products, which are the results of development and activities by our company, such as e-health.
The new organization encourages new and innovative ways of working with a common goal to be more efficient, to be closer than ever before to our customers, to improve sales both in the existing and new segments and to increase margins and further strengthen cash flow”, underlined Gordana Kovačević.
Ericsson Nikola Tesla Company Communications
