Ericsson NT published their Q1 2021 results yesterday, showing a -9% YoY decrease in sales, a 26% YoY increase in EBITDA and a net profit of HRK 41m (+38% YoY).

In Q1 2021 Ericsson NT posted sales in the amount of HRK 445.9m, representing -8.6% YoY decrease. The decrease in sales came as a result of cyclical investments of their main customers in the networks. Sales in the domestic market amounted to HRK 178m, marking a decrease of 10.9% YoY. Export market sales fell 21.1% YoY to HRK 50.8m. The decrease was due to delayed investments of telcos caused by the COVID-19 pandemic. In addition, the political and economic crisis in some export markets made business more difficult. Finally, Ericsson market recorded sales in the amount of HRK 217.1m which represent a decrease of -2.8% YoY.

Sales Breakdown (HRK m)

Gross profit amounted to HRK 63.1m, up by 26.9% YoY, due to lower transition and transformation costs, and the impact of cost-efficiency program. As a result, gross margin soared 4 p.p. to 14.2%.

EBIT amounted to HRK 45.2m marking a 35.2% YoY increase due to an improved gross profit. Meanwhile, selling and administrative expenses increased by 2.8% YoY due to increased presales activities related to 5G radio access and core networks, and broadband network implementation projects.

Below the operating line, the net financial result more than doubled, amounting to HRK HRK 3.2m (+194%) because of positive FX movement. Finally, net profit amounted to HRK 40.8m representing a 38.2% YoY increase.

Ericsson Key Financials (HRKm)