Gordana Kovačević, the president of Ericsson Nikola Tesla commented on the Company’s performance:
“During Q1 the Company was strongly focused on several strategic projects and activities, bearing in mind all business challenges, and opportunities, as well as the need for fast adjustment to business environment. New business opportunities appeared, both in the domestic and foreign markets, primarily in the Commonwealth of Independent States (CIS). The number of innovative ideas during 2012 grew considerably, resulting in a few valuable innovations that were recognized at the global level and proposed to be patented.
As concerns the domestic market, we launched with our long-term partner Vipnet the first commercial LTE network in Croatia. I am very glad that Vipnet has recognized the strength of Ericsson Nikola Tesla, which as a part of Ericsson Corporation, is always being the first one to bring the world-class achievements to Croatia. By number of commercial contracts, Ericsson is the world market leader with the share of more than 60 percent. The most recent data show that Ericsson concluded 45 LTE/EPC (Evolved Packet Core) contracts in 23 countries on 5 continents, thus achieving the Ericsson LTE network coverage of 215 million users.
Furthermore, we successfully responded to challenges put before us within the demanding and complex tender process by HT, thus ensuring further cooperation with this operator. Ericsson Nikola Tesla was selected as the preferred partner for implementation of IP/MPLS backbone network and the modernization of PSTN network (by implementing xDSL technology) as a continuation of the already started project of modernization of the entire HT telecommunications network.
Currently, in the CIS market, intensive marketing and sales activities are going on, as well as arrangements covering the modernization of mobile network and the latest multimedia solutions. We expect the sales revenue to grow significantly in the period to come, especially as concerns the Russian market.
During Q1 2012, we continued to witness unfavorable economic trends and careful approach of customers to capital investments. Accordingly, the sales income decreased by 20% year-over-year, as the result of smaller business volume in the domestic and foreign markets. At the same time, sales to Ericsson market reported growth year-over-year. The gross margin grew to 19.2%, and the operating profit was at the last year's level, despite the smaller sales volume, while the net profit was higher by 11.8% year-over-year. The strong cash flow from operating activities amounted to MHRK 130.1. Thus, the total funds, including the current financial assets amounted to MHRK 725.5 at the end of the quarter.
In the next period, taking into account any changing business circumstances, we shall continue to deliver exceptional values to customers by focusing on what is essential and on innovations, as well as on seizing unique market opportunities. In order to remain competitive, we shall retain the top/best quality employees and provide optimum usage of all our resources.“
Communications Ericsson Nikola Tesla
