Ericsson Nikola Tesla achieved double the profit in the first three quarters

In the first nine months of 2023, the Ericsson Nikola Tesla Group recorded a continuation of stable operations, as confirmed by the achieved financial results.

– In the first nine months of 2023, the Ericsson Nikola Tesla Group achieved solid business results, demonstrating our resilience and strength to effectively respond to challenges and new business opportunities. Sales revenues recorded a slight increase compared to the same period last year, amounting to 205.9 million euros, as a result of the continuous growth of service revenues for Ericsson, which neutralized lower revenues in the domestic and other export markets, commented Gordana Kovačević, President of Ericsson Nikola Tesla.

Compared to the first nine months of the previous year, the gross margin increased to 14.0 percent, primarily as a result of the sales mix and focus on operational and cost efficiency. Operating profit is up 81.7 percent, amounting to 24.7 million euros, while net profit is up 94.6 percent, amounting to 20.5 million euros. A negative cash flow from operating activities was recorded, as a result of customer payment dynamics and delays in the final realization of certain projects.

– By the end of the financial year, we expect to achieve positive cash flow from operating activities. We concluded the quarter with a solid balance sheet, with equity accounting for 38.7% of total assets. Cash and cash equivalents, including short-term financial assets, amounted to 59.5 million euros (32.5% of total assets) at the end of the third quarter, the company added.

– When it comes to services for Ericsson, we are proud that at the regular semi-annual R&D Management Business Review meeting, the high level of quality of our R&D center was once again confirmed in all categories and all business segments. Effective deliveries of high-quality software and rapid delivery of key functionalities that ensure Ericsson’s technological leadership were particularly emphasized. Positioning has been achieved in new, strategically important areas such as Cloud RAN, which opens up opportunities for further work on the latest technologies in the telecom industry. Furthermore, our experts in other expert centers are achieving notable results in the realization of global projects, among which we would mention the successful implementation of the application functionality testing project in Ericsson’s 5G core network on the distributed Google Cloud platform, Kovačević stated.

In the domestic market, after a period of increased investment in network infrastructure, driven by the growth in demand for telecommunications services and the allocation of 5G spectrum, operators are focusing on monetizing the 5G network and slowing down capital investments.

– Our company, as the leading local and regional provider of telecommunications solutions and services, has continued to provide quality support to our partners, operators Hrvatski Telekom and A1 Hrvatska, in further modernization of telecom networks with an emphasis on 5G implementation. Furthermore, we are focused on fulfilling existing contractual obligations with Hrvatski Telekom in the area of managed services and providing support for the transition of the technological unit for the construction and maintenance of the network for Hrvatski Telekom from Ericsson Nikola Tesla Services to Hrvatski Telekom as of January 1, 2024, they added.

In export markets, the company has continued quality cooperation with operators HT Mostar, Crnogorski Telekom, IPKO Kosovo, Telekom Kosova, and Ucom Armenia, focusing on timely delivery of contracted jobs and new business opportunities.

– I would highlight the completion of the first phase of modernization of the radio and transmission part of the Telekom Kosovo network, as well as the first phase of the implementation of 5G base stations in the IPKO operator’s network, which will enable our long-term partner IPKO to provide its users with the first 5G signal in all major cities in Kosovo. We are pleased that this year our partners in both domestic and export markets have won awards for the best performance results of their mobile networks, which confirms the quality of the solutions and services we deliver, she added.

New contracts

In the Digital Society segment, new contracts have been signed with the State Geodetic Administration of the Republic of Croatia, the Ministry of Health, the Ministry of the Interior, and CARNET. The completion of two significant projects was also marked: e-Culture (digitization of cultural heritage) and WaterQ (solution for digital transformation of water quality monitoring). In the area of national security, cooperation with the Ministry of the Interior of Montenegro continued with the signing of a contract for the maintenance of the 112 Center.

Due to high interest from customers and partners,’Technology Days’ were held at the beginning of October, where, along with the latest Ericsson radio products, numerous innovative solutions focusing on 5G monetization (network slicing, open network interfaces), possibilities of 5G private networks (solutions for energy and digital twins, as well as remote 5G control of robots), infrastructure for critical communications, and ICT solutions of Ericsson Nikola Tesla in the field of sustainability (green solutions for industry, cities, water quality monitoring, ESG reporting module) were presented.

– During the third quarter, we continued to invest in key competencies, the development of solutions, products, and services in strategic areas, and the digital transformation of the Ericsson Nikola Tesla Group. Given the current market environment, we remain focused on profitability, cost and operational efficiency, cash flow from operating activities, and responsible risk management until the end of the year. We are also focused on strategic planning for the period until 2026, thoroughly analyzing the state of our markets, trends in the ICT industry, and the needs of our customers. Our goal is to strengthen our leading position in mobile networks, grow in the Digital Society segment, and maintain and continuously improve our position in the services and R&D segments. We possess significant intellectual capacity and innovative potential in numerous technological areas, making us a reliable partner to our customers in the development and implementation of the latest ICT solutions, Kovačević concluded.