In the evaluation of the Company's performance Gordana Kovačević, the President of Ericsson Nikola Tesla, pointed out the following:
„The environment in which Ericsson Nikola Tesla operated in the first-half of this year continued to be both demanding and complex. The underlying business performance however continues to be stable. While Orders for the first half of 2010 are slightly down on the comparable period for 2009, we have secured new business opportunities in export markets and delivered Sales which are flat over the same period. Growth in our export markets (particularly Belarus and Bosnia & Herzegovina) is offset by a contraction in volumes in the domestic market reflecting continued delays in investments and ongoing significant price pressure. Our overall business has been and continues to be impacted by industry component shortages and Ericsson supply chain bottlenecks which lead to delays in deliveries.
During the period, as previously announced, the company recorded an impairment charge of MHRK 126.5 in respect of Customer Financing balances in Kazakhstan. As a result, we recorded an Operating loss of MHRK 54 during H1 2010. Excluding the impairment charge, an underlying Operating Profit of MHRK 72.5 shows a significant improvement compared with MHRK 5 in the same period of 2009.
Our Balance Sheet and Cash position at June 30, 2010 remains strong and can be further improved through the accelerated settlement of remaining amounts outstanding in respect of the impaired Kazakhstan receivables. We have already taken steps in partnership with Banks and Financial Institutions to secure all future significant Customer financing exposures are managed through these Financial institutions with no recourse to Ericsson Nikola Tesla.
In conjunction with the global Ericsson organization, Ericsson Nikola Tesla continually reviews its ways of working and business structure to ensure that it adapts to our changing business environment and that we are best placed to capitalize on future opportunities. Accordingly, in line with the new Ericsson regional organization which is at the final stage of implementation, Ericsson Nikola Tesla is positioned within the Region West and Central Europe (RWCE). This new regional organization replaces the market unit concept which has been in place for the last nine years. We believe that these changes present additional possibility to strengthen our organization and culture and to further improve our position in our chosen business segments.“
