ZAGREB, February 20, 2019 – Ericsson Nikola Tesla generated a net profit of 113.6 million kuna in 2018, an increase of 67.4% over the previous year, the telecommunications equipment manufacturer said in a financial statement on Wednesday.
Sales revenue increased by 5.2% to 1.56 billion kuna. The domestic market accounts for 23.9% of total sales revenue, services for Ericsson account for 61.3 percent, of which 11.4% relate to managed services in Croatia), while other export markets account for 14.8%.
“The domestic market recorded a significant growth in sales revenue due to operators’ investment in mobile networks modernisation and digital transformation projects. The export markets recorded lower sales revenue affected primarily by the ramping down of network modernisation projects and challenging economic and political environments in some markets. The Ericsson market continuously records solid growth and contributes to the overall stability of financial performance. Export accounts for 65% of the Group’s total sales revenue,” CEO Gordana Kovačević said.
In the domestic market, sales revenue totalled 372.6 million kuna, up 34.7% in comparison with 2017. In the Ericsson market, sales revenue increased by 3.2% to 955.8 million kuna and in the export markets (excluding the Ericsson market) it fell by 17.7% to 229.8 million kuna.
Other key indicators also showed growth. Gross profit rose by 7.0% to 161.4 million kuna and operating profit went up by 56.3% to 118.3 million kuna.
“The strong growth in operating profit is due to higher gross profit, lower sales and administrative costs, and projects realised in line with the Investment Promotion Act,” Kovačević said.
In the third quarter of the year, the company initiated a new cycle of strategic planning for the period 2019-2023.
“In the upcoming period we expect new business opportunities, as well as challenges. As a response to a demanding market environment, we closely cooperate with customers to fully understand their needs, we adjust our organisation and ways of working, and invest in our employees’ competencies development and our technology leadership. We remain focused on cost and operating efficiency, capital efficiency and strategic risk management. Even though costs related to strategic contracts and 5G field trials will impact profitability short term, they will strengthen our business and market position in the long term,” Kovačević said.
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