Ericsson Nikola Tesla Saw Revenue Slowdown in Q1

Ericsson Nikola Tesla recorded lower sales revenue in the first quarter of 2021 by 8.6% (HRK 445.9 million), compared with the same period last year. The gross margin improved to 14.2% (10.2%), due to lower transition and transformation costs and the effect of cost-efficiency program.

The company said it is a result of cyclical investments of their main customers in the networks. With a share of 60.1% in the total revenue generated in export markets, the company remains one of the largest Croatian exporters. ENT says that telecom operators on the domestic market announced continuation of investments in infrastructure, high-speed Internet coverage and 5G. By implementing these plans, the domestic telecom operators, as well as the overall telecommunication market, follow European and global trends that in spite of pandemic, but also because of it, show the direction of accelerated development of communication technologies and services. The beginning of the full implementation of 5G in Croatia is expected in Q3 2021, after HAKOM assigns the necessary radio frequency spectrum.

"Therefore, we are especially pleased that we have signed a new five-year agreement with A1 Hrvatska. Thus we have continued to be the supplier of the radio part of the mobile network of this operator and at the same time a strategic partner in the field of 5G technology," said Gordana Kovačević, President of Ericsson Nikola Tesla. "With the strategic partner Hrvatski Telekom, we continue to cooperate on all projects contracted during 2020. We would like to single out Management Services Agreement for the construction and maintenance of fixed and mobile telecommunications infrastructure which is carried out by our subsidiary Ericsson Nikola Tesla Servisi, as well as the cooperation agreement in the field of radio access networks with emphasis on 5G. In the segment of ICT solutions for Industry and Society in the domestic market, we have signed new agreements with the Croatian Ministry of the Interior, the Croatian Ministry of Justice and Public Administration, and State Geodetic Administration," continued Kovačević.

The company said that in the export markets, sales revenue is lower year-over-year due to the dynamics of operators’ investments in networks, and along with the challenges brought by COVID-19 pandemic, the realization of projects is aggravated by the political and economic situation in some markets. Their activities in these markets continue with a strong focus on risk mitigation.