Dear clients,
We would like to inform you that we will not be publishing our daily IC Market Espresso in the period from July 29 until August 16 due to the upcoming vacation season. The first IC Market Espresso after the break will be sent on August 19.
In the meantime, we hope that you will be enjoying yourselves on a sunny beach somewhere.
Your IC Research and Equity team
Ericsson NT published their H1 2019, showing a 7.8% YoY increase in sales, while EBITDA increased by 13% to HRK 115.9m. Meanwhile net profit rose 15.6% YoY to HRK 71m.
Ericsson posted an improved top line performance in H1 2019 as the company recorded sales in the amount of HRK 821.7m (+7.8% YoY). When breaking down revenue, domestic market accounted for 21.5%, services to Ericsson account for 64.4% (of which 12% is related to Managed Services in Croatia), while other export markets account for 14.1%.
Sales in the domestic market decreased 7.3% YoY due to project execution dynamics. In H1 2019 the Group continued to work closely with Croatia’s two largest telcoms, HT and A1, to modernize their radio access networks. The goal of the modernization is to prepare the infrastructure of those companies for the implementation of the 5G network in the upcoming years. Among other projects, Industry & Society projects have a significant positive impact on the business result in the domestic market as well. Numerous activities are ongoing on projects of informatization of healthcare system, Joint Information System of Land Registry and Cadaster and state border control.
Gross profit remained flattish, amounting to HRK 119.4m (+0.8% YoY), while the gross margin decreased to 14.5% (from 15.5% in H1 2018) due to an increased engagement and working capital on projects with key customers. Furthermore, with sales and administrative costs remaining at the same level (HRK 35.5 in H1 2019 compared to HRK 35.3m in H1 2018), EBIT was also ended the first half of the year flat at HRK 83.9m.
Below the operating line, the company recorded a net financial result of HRK 1.3m which is a significant leg up to the bottom line, as oppose to last year’s loss of HRK 0.9m. Furthermore, tax expenses are down 34.7% YoY due to reliefs on employment according to Investment Promotion Act. As result, net profit is up 15.6% YoY, amounting to HRK 71.1m.
Turning our attention to the balance sheet, the company continues to operate virtually without debt, as the net cash position amounts to HRK 83.7m.
Meanwhile cash flow from operating activities surged to HRK 31.9m (from HRK 6.3m in H1 2018), primarily due to the application of IFRS 16 standard and release of provisions on receivables from prior years.
According to a statement released on the Belgrade Stock Exchange yesterday, the Belgrade Airport has offered to sell 442,361 treasury shares at RSD 750.45 per share.
According to a statement released on the Belgrade Stock Exchange yesterday, the Belgrade Airport has offered to sell 442,361 treasury shares at RSD 750.45 per share. One should note that shareholders will be able to purchase one treasury share per each 80 shares they already own as of July 22. Shareholders with less than 80 shares may acquire only a part of a treasury share, becoming a co-owner with another investor, the Airport added.
The proposal is valid until Aug 26th.