Ericsson annual report boasts doubled net profit

Ericsson will keep trimming costs in Sweden, the company said on Thursday after doubling its profits last year, with the net result nonetheless falling below expectation.

Ericsson annual report boasts doubled net profit
An early Ericsson model. File photo: Alexandre Dulaunoy/Flickr

Swedish telecom equipment maker Ericsson said Thursday that its net profit rose by 108 percent to 12 billion kronor (1.36 billion euros, $1.84 billion) last year thanks to a reorientation towards more profitable projects, and despite sluggish sales.

"Our focus on profitability started to pay off and operating margin for the group gradually improved in 2013, despite significant currency headwind, driven primarily by improvements in Networks and Network Rollout," CEO Hans Vestberg said in a statement.

Sales fell in northeast Asia following a drop in investments in the GSM telecom system in China and a slowdown in business in Japan and South Korea. The group's North American sales were also cut in half in the CDMA business, a different system used for mobile phone access.

Ericsson said it would continue with cost cutting measures, particularly in Sweden.

At 6.41 billion kronor, the group's fourth quarter revenue fell short of analysts' expectations of 7.22 billion kronor. The Swedish company's annual turnover also remained stable at just over 67 billion kronor, despite receiving a sizeable settlement in a licensing dispute with the South Korean mobile giant Samsung.

The group's shares were up 3.49 percent on the Stockholm Stock Exchange at 1300 GMT in an overall market down by 0.66 percent.

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Ericsson suspends all Russia operations indefinitely

Swedish network equipment maker Ericsson said Monday that it was suspending all of its Russian operations over the war in Ukraine for the foreseeable future.

Ericsson suspends all Russia operations indefinitely

The telecom giant already announced in late February that it would stop all deliveries to Russia following Moscow’s February 24 invasion of Ukraine.

“In the light of recent events and of European Union sanctions, the company will now suspend its affected business with customers in Russia indefinitely,” Ericsson said in a statement.

The company added that it was “engaging with customers and partners regarding the indefinite suspension of the affected business.”

“The priority is to focus on the safety and well-being of Ericsson employees in Russia and they will be placed on paid leave,” it said.

READ ALSO: How has Sweden responded to Putin’s war in Ukraine so far?

Hundreds of Western firms ranging from Ikea to Coca-Cola, Goldman Sachs and McDonald’s have stopped operations in the country since the invasion, with French banking group Societe Generale announcing Monday it was selling its stake in Russia’s Rosbank.

Ericsson has around 600 employees in Russia, and is a “major supplier to the largest operator MTS and the fourth largest operator Tele2,” a company spokeswoman told AFP, adding that together with Ukraine, Russia accounts for less than two percent of revenue.

As a result, the equipment maker said it would record a provision for 900 million Swedish kronor ($95 million, 87 million euros) for the first quarter of 2022 for “impairment of assets and other exceptional costs,” though no staff redundancy costs were included.
Ericsson is due to publish its first quarter earnings on April 14.