Ostvareni Rezultati Doničkog Društva Ericsson Nikola Tesla U Prvih Devet Mjeseci 2004
Ericsson Nikola Tesla d.d.
Business results of joint stock company Ericsson Nikola Tesla in Q1 2008
Date: 29th April 2008
Highlights:
-Orders booked391.8MHRK
-Sales revenues374.3MHRK
-Gross margin17.7%
-Operating profit 31.2MHRK
-Profit before tax28.5MHRK
-Net profit 22.8MHRK
-Earnings per share 17.4 kunas
-Return on sales before tax 7.6%
-Cash flow from operating activities 96.4MHRK
Performance evaluation
„In the first quarter of the year Ericsson Nikola Tesla's operations were stable, witha considerable growth of sales revenues and operating profit and witha stable gross margin. The overall business results were, despite hedging measures taken, influenced by negative exchange rates deviationscaused primarily by a continued US dollar fall.
We are aware of the fact that a continued stable businessimplies positioning in new segments, in new markets and toward new customers;at the same time we have to intensify business with our existing customers. Accordingly, we strengthened our position in Kosovoby enteringthe fixed telecom segment, beside mobile,and we continued our collaboration withMegaFon, one of the three major mobile operators in the Russian market. Our goal is to secure competitiveness in domestic and export markets also through continuous cost optimization.
Today the media, the Internet and the telecommunications are closely connected industries and they form a new overall system with opportunities for business growth and for the accomplishment of stakeholders’interests. With multimedia users get access to a vast services range, media companies are able to efficiently offer new, attractive contents and infrastructure suppliers participate in creating profitable business models. Users' influence on ICT trends today is very strong;users impose market trends to be obeyed by operators and communication services providers. Accordingly, Ericsson has broadened its services and solutions portfolio to enable the operators to offer to users multimedia services and thus to achieve considerable revenues from the new business segment,“ emphasized Gordana Kovačević, company president.
Compared to the Q1 2007, Ericsson Nikola Tesla performed as follows.
Sales revenues went up 31.5% and total 374.3MHRK,primarily due to good performance in domestic market but also to stable sales in major export markets. Orders booked are lower than last year and amount to 391.8 MHRK.Last year’s highlevel of orders booked was influenced by a financially very significant contract with the Belarus operator JV MDC Velcom, signed end of Q1 2007.We continued our collaboration with this customer in 2008 and we expect to conclude new business deals in the 2nd quarter 2008.
In domestic market sales revenues amount to 141.9 MHRK, this is up 22.1% compared to the same period last year.We have to emphasize the continued collaborationwith Vipnet and T-HT, and ourstatus as an exclusive telecom equipment and services provider for the third mobile operator Tele2.
In the regional markets (Bosniaand Herzegovina, Montenegro and Kosovo)the company achieved 88.1 MHRK sales revenues; 49.1 MHRK out of that sum was achieved in Kosovo market. Sales revenues in Bosnia and Herzegovina and Montenegrowent down 14.3%compared to the same period last year; the reason is that operators' business activities and investments had been planned for the 2nd quarter 2008.
In the Commonwealth of Independent States the sales revenues amount to 47.2MHRK, an increase of 49.8%.
Ericsson Nikola Tesla's good standing in the Ericsson Corporation, primarily in the research and development area and in customer solutions and services, increased the business volume inEricsson market. Sales revenues total 97.1MHRK, an increase of6.2%.
Financial indicators – operational profitability
Operating profit is higher 25.9% resulting from a larger businessvolume. Gross margin is somewhat lower than in the same period last year (17.7% compared to 19.1% last year);however, in the first quarter the decreasing trend was stopped.
The operating costs (SG&A) went up 16% compared to the last year, primarily due to additional selling expenses in Kosovo market and to intensive work with existing and potential customers; they total 36.6 MHRK.
Financial revenues are on the last year’s level, amounting to 18.8 MHRK. However, total revenues from financial activities were affected by negative exchange rate differencesto the amount of 21.5 MHRK, resulting from strong US dollar drop and appreciation of kuna towards euro. Accordingly, profit before tax is lower than last year, amounting to 28.5 MHRK.
Company's liquidity is still very strong. Positive cash flow from operating activities is 96.4 MHRK, primarily due to excellent receivables collection.
Important business (deals) and contracts in major markets
Domestic market in 1Q 2008 features the company's continued collaboration with existing customers, mobile and fixed operators Vipnet, T-HT and Tele 2 in introducing new functionalities in their network.
Among other things, Ericsson Nikola Tesla and T-HT signed two new multimedia service contracts: for IPTV Head-End equipment and for IPTV stream and picturequality measurement system, the first of the kind in the country.
The company strengthened its good position in Kosovo market by concluding business with a new customer, the PTK operator (Post and Telecommunications of Kosovo J.S.C.). It is about broadband fixed access to the Internet contents and services based on the cutting edge VDSL2 technology.
In Bosnia and Herzegovina the collaboration with BH Telecom was continued; the company signed a support agreement for fixed, mobile and service network for location-based services.
The first three months were good in terms of export to the Commonwealth of Independent States. The company signed several contracts with the existing and new customers for expansion and modernization of fixed telecommunication networks, for delivery of solution for fixed broadband network and for delivery of most recent IP oriented enterprise solutions.
Relating to Ericsson market,the company'sR&DCenter obtained an additional responsibility regarding the Integration-Verification services; specifically, it is about entering the MSC-S Blade Cluster System testing. Among the present activities of the R&D Center two projects have to be pointed out: signaling function for a new generation fixed network node TSS (TSS- telephony softswitch) for Great Britain and mobile node MSS (MSS-mobile softswitch) for the global market. Also the new phase of platform development for MGW nodes has started.
The GlobalServiceDeliveryCenter, GSDC, Croatia was certified for the second level of Ericsson's Service Delivery Maturity Model (SDMM); thus the GSDC additionally confirmed its standing as a reliablebusiness partner within the Corporation.The mentioned Maturity Model is a very complex matrix model where the maturity level is viewed from three perspectives – people management, delivery performance and organizational culture.
Ericsson Nikola Tesla, as an integral part of the Ericsson Group, supports the modern ways of communicating. The company’s activities include marketing and sales, research and development, design of the total communications solution, services in the multi-service and mobile networks area including the mobile Internet and complex system integration in all business areas. The company provides innovative ICT solutions that constantly improve people’s life and create new value.
Company Communication of Ericsson Nikola Tesla
For additional information, please contact:
Snježana BahtijariOrhideja Gjenero
Company Communication DirectorInvestor Relations Manager
Ericsson Nikola Tesla d.d.EricssonNikolaTesla d.d.
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HR-10 0002 ZAGREBHR-10 002 Zagreb
Phone: + 385 1 365 4556Phone: +385 1 365 4431
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