In Q1, the company observed a 14% YoY increase in sales, increase in EBITDA of 12.4% and an increase in net income of 8.6%.
Key Financials (Q1 2019 vs Q1 2018) (HRK m)
As Ericsson Nikola Tesla published their Q1 2019 report, we are bringing you key takes from it. According to the report, in Q1, the company recorded sales of HRK 388.2m, which represents an increase of 13.8% YoY. Of that, the domestic market accounted for 23.6%, services to Ericsson accounted for 65.1% (of which 10.1% is related to Managed Services in Croatia), while other export markets accounted for 11.3%.
Such an increase could be attributed to business expansion and gaining new responsibilities, primarily in 4G/5G. The company notes that their experts are engaged worldwide in numerous projects related to 5G, and in addition, part of 5G development takes place in the Company’s R&D Center.
The domestic market also recorded significant growth in sales revenue. The company notes that Croatia’s leading operators remain focused on mobile networks modernization, the preparation for the introduction of 5G, and digital transformation projects. The revenue growth on the domestic market was also significantly impacted by the successful implementation of the State Border Control System of the Republic of Croatia.
Ericsson NT Sales Breakdown
In Q1, the company observed higher operating expenses by HRK 48.2m (+16%) which could be attributed to investments in the development and growth of Research and Development Center, and a significant increase in engagement and working capital on projects with the Group’s key customers.
Going further down the P&L, EBITDA amounted to HRK 58.3m, which represents an increase of 12.2%. Employee expenses and other operating expenses share in sales decreased which has positively influenced operating profitability. When observing the company’s EBIT in Q1, it observed a decrease of 2.2% YoY. The increase could be attributed to higher depreciation and amortization which increased by HRK 7.3m.
Despite a decrease in EBIT, Ericsson Nikola Tesla recorded an increase in net income of 8.6%, amounting to HRK 32.9m. The increase was partly caused by a better net financial result in Q1 2019, which amounted to HRK 0.96m, compared to HRK -1.4m in Q1 2018.
Key Financials (FY 2008 – FY 2018) (HRK m)
On the balance sheet, the company reported total assets of HRK 980.6m, which represents an increase of 17% YoY. This is mainly due to a significant increase in inventory and right-of-use assets. The level of inventory increased due to increased engagement on network modernization projects.
Turning our attention to the dividend payout, last week the company proposed a dividend of HRK 70.6 per share, which represents a dividend yield of 6%. Ex-date was set on 18 June 2019. To read more about the proposed dividend click here.