In the first six months of 2022, the Ericsson Nikola Tesla Group performed solidly despite the extremely turbulent political environment, inflation, the increase in labor, energy and material prices, disruptions in supply and the lack of experts in the STEM field.
“In the first half of 2022, we continued with the implementation of numerous projects on the domestic and export markets and achieved sales revenues of more than HRK 1 billion. We operated solidly despite the extremely turbulent political environment, inflation, the increase in labor, energy and material prices, disruptions in supply and the lack of experts in the STEM field,” emphasizes Gordana Kovačević, president of Ericsson Nikola Tesla.
The war in Ukraine significantly affects our business in Belarus, as well as in the surrounding markets. As a result of the sanctions introduced by the EU, the termination of the contract for the eHealth implementation project of the Republic of Belarus was initiated, explains Gordana Kovačević.
“We stopped the signing of already agreed new contracts and postponed the implementation of previously signed multi-year contracts with telecom operators in Belarus, and their further implementation will depend on the development of the situation with sanctions, which we are continuously monitoring. In order to mitigate the consequences of the risks faced by the company, we continuously monitor the situation in all market and business segments and take appropriate measures. Diversification of business enables us to operate stably and mitigate the negative effects of the crisis by increasing the engagement of our experts within the global organization in development and research work and other high-value services, and we are actively working on the development of existing and new business segments,” concludes Gordana Kovačević.
Compared to the first half of 2021, sales revenue at the Group level recorded a growth of 4.7 percent, primarily due to the increase in sales in the area of services for Ericsson. The gross margin recorded a decrease to 9.7 percent, as a result of sanctions on the Belarusian market, an increase in wages in response to inflationary pressures and an increase in the prices of energy, raw materials and materials, while the operating profit was 35.6 percent lower and amounted to HRK 76.9 million. A positive cash flow from business activities was achieved in the amount of HRK 20.5 million, which is in line with expectations given the market environment. We closed the second quarter with a healthy balance sheet, with the share of our own capital in total assets of 30.9 percent. Cash and cash equivalents, including short-term financial assets, amounted to HRK 515.1 million (41.0 percent of total assets) at the end of the second quarter. The domestic market is characterized by the continuation of investments by leading operators in network infrastructure.
Accordingly, in the past period, the Ericsson Nikola Tesla Group continued with deliveries related to the 5G network and optical access network for Hrvatski Telekom, which recently received the umlaut ‘Best in Test’ award for the best and fastest fixed and mobile network.
The results of the umlaut analysis were certainly positively influenced by the high-quality realization of the projects on which our experts worked.
Cooperation with our strategic partner A1 Croatia continued on expanding the coverage and capacity of the radio 5G network, expanding the capacity of the 4G network and modernizing the convergent 5G core network.
Furthermore, as part of the pilot project, in cooperation with the company Odasiljači i veze, we implemented a private 5G network in a factory in the Šibenik-Knin County based on the Ericsson Private 5G solution. This solution represents a fully independent 5G network of high performance, high level of security, with remote management and automation capabilities.
On the domestic market, in the Digital Society segment, activities on e-health, e-business and public safety projects continued, and new contracts were signed, among others, the continuation of cooperation related to support services for the application system of the Joint Information System of Land Registers and Cadastres was agreed ( ZIS).
When we talk about innovative solutions, the Center for Research and Development (R&D), as well as expert centers for solutions and services, are recognized for their excellence at the level of the Ericsson corporation and are continuously given new responsibilities and significantly contribute to the Group’s business results.
Cooperation on the modernization of mobile networks continued with long-standing customers in neighboring export markets. Fixed and mobile network maintenance was contracted with HT Mostar until the end of 2023. Also, the activities on the modernization of the mobile network of Montenegrin Telekom should be singled out, which include increasing capacity, expanding and covering the whole of Montenegro with a 5G signal, and putting into operation the first 5G pilot network on the Kosovo market with the operator IPKO.
With the aim of further development of the company, along with the expansion of the existing offices in Zagreb, Split and Osijek, we opened a new office in Rijeka at the beginning of June. By opening centers in other Croatian cities, ENT enables ICT experts to stay in Croatia and continuously improve themselves by working in the dynamic ICT industry, on the latest technologies and interesting projects in cooperation with top experts from all over the world. We also give additional momentum to economic and technological development, and as a socially responsible entrepreneur we contribute to the balanced development of Croatia.
“Ericsson Nikola Tesla Group has more than 3,500 employees, and we are extremely proud that more than 1,800 experts work in the field of software design, and there is potential for further growth. In the first six months of this year, more than 130 employees joined our Group, mostly highly educated experts from the STEM field. Engagement in our company enables ICT experts to positively influence the life and work of millions of people with their work every day. Therefore, I believe that even in the coming period, experts from the STEM field will recognize Ericsson Nikola Tesla as the employer of their choice. Therefore, regardless of all the challenges, we will continue to invest in 5G and new technologies, Industry 4.0/5.0, new solutions, markets and customers, the development of knowledge and skills of our employees, the digital transformation of the Ericsson Nikola Tesla Group and the creation of new jobs to ensure long-term company development. We are also preparing for our additional high-quality contribution to the full development of Digital Croatia in the coming decade”, concludes Gordana Kovačević.