Gordana Kovačević, the President of Ericsson Nikola Tesla commented on the Company’s performance:
“Ericsson Nikola Tesla operated in a very complex and challenging environment characterized by reduced capital investments by telecom operators, permanent pressure on prices and fierce competition. In certain markets, we have witnessed unfavorable political and economic trends. As of Industry and Society segment budget cuts and postponement of investments are still present.
Sales revenue and orders booked decreased by 4% and 24% respectively, year-over-year, mainly due to the decreased business volume in the CIS markets. However, the domestic and Ericsson markets recorded a slight revenue increase year-over-year. Although the regional markets reported a considerable sales revenue growth, the orders booked level in H1 was, due to postponement of customer investments, lower year-over-year.
Decrease in the gross margin year-over-year was due to investments into regional markets aiming at securing new business and strengthening market share. In addition, the gross margin was impacted by the product mix and by lower margins on certain projects in the Industry and Society segment. We maintained a stable financial position and achieved net income of MHRK 36.9 while, compared to the same period of the prior year, the write-off of Kazakhstan receivables contributed to a loss of MHRK 42.4. The Company has a strong balance sheet with total cash balances, including short-term financial assets, of MHRK 542.4 and equity ratio of 75.8%.
In compliance with the Company strategy, the focus on export markets has been further strengthened. The strategic programs for revenue growth have been aimed to increase the business volume with the existing customers to whom we have offered network transformation and further development in multimedia and broadband access through mobile and fixed networks. Furthermore, with the extension of business activities with our current customers, the strategic aim and focus are on being awarded new responsibilities, and winning new customers. At the same time, we continue with a strong discipline regarding risk management. We also invest into competence development in order to be aligned with Ericsson’s global and regional business plans for the period until 2015, thus gaining competences on the state-of-the-art IP-based products and platforms, such as LTE, IMS, IPTV, etc. This enabled us to improve our employees' skills in the most attractive technologies, enhance the project management and facilitate the cooperation and mobility of our specialists within the corporation.
Our final goal is that, by understanding our customer needs and by partnering with them, the value and quality of our offer is increased through creative and advanced solutions, thus minimizing the price erosion.“
Communications Ericsson Nikola Tesla
