Stable business performance in H1 2025

• Sales revenue amounted to EUR 110.8 million, up by 1.7% year-over-year
• We have continued the activities in line with the multi-year contracts

In her statement about the company’s business results in H1 2025, Gordana Kovačević, President of Ericsson Nikola Tesla’s Management Board, highlighted: “In H1 2025, total sales revenue amounted to EUR 110.8 million, up by 1.7% year-over-year, as a result of increased sales in Croatia and a stable sale of services to Ericsson. We continue to witness a slowdown of telecom operators’ investments in mobile infrastructure, uncertainties related to complex digital transformation projects and pressures on the prices of our products and services. In such a challenging market environment, in order to ensure stable business performance and maintain competitiveness, we focus on business diversification through the development of new products and services, and new customers. Furthermore, we focus on cost effectiveness and efficiency of our business processes, and some of the key steps we take on this path are the introduction of technology such as artificial intelligence, automation of business processes and initiatives within internal digital transformation.

During Q2, we have continued to fulfill our obligations in line with multi-year contracts related to the expansion and modernization of telecom networks, and we have been working intensely on the realization of activities and new business opportunities in the Digital Society segment.  We would like to highlight a contract with the Croatian Pension Insurance Institute (HZMO) related to the building and implementation of an IT system to support basic processes (eHZMO), and the contract with the company Odašiljači i veze (OiV) for the design and construction of passive electronic communications infrastructure. We have also continued the cooperation with the Ministry of the Interior of the Republic of Croatia related to the maintenance of stationary and mobile systems for monitoring the external EU border.“

In export markets, we have continued quality cooperation on the modernization and maintenance of mobile networks of operators HT Mostar, Crnogorski Telekom, Ipko Kosovo, and Telekom Kosova.

During Q2, our Research and Development Center (R&D) continued the development of functionalities on new Radio platforms, the development of strategic functionalities in the domain of 5G RAN software, and Compute platforms functionalities. The strategic focus of R&D remains on building organizational E2E software development capability and positioning Ericsson Nikola Tesla as a supplier that is highly performing and capable to deliver such solutions in the most complex areas of mobile technology (Network segment). We are constantly working on acquiring new responsibilities in strategic areas, and the fact that we are continuously among the best rated R&D Centers, as well as the high quality of our deliveries, puts us in a good position to be chosen as a strategic partner for new business opportunities.

In terms of financial indicators, gross profit amounted to EUR 13.9 million, down by 12.0% year-over-year, as a result of increased material and employee costs, and activities aimed at optimizing operations. Gross margin was 12.5% (H1 2024: 14.5%). Operating profit amounted to EUR 11.4 million, down by 13.2% year-over-year, as a result of lower gross profit and increased selling and administrative expenses. Operating margin amounted to 10.3% (H1 2024: 12.0%). Net profit amounted to EUR 9.6 million, up by 24.8% year-over-year. We concluded end of H1 with a solid balance sheet and an equity ratio of 36.7%. Cash and cash equivalents, including the short-term financial assets, amounted to EUR 56.6 million, which accounts for 32.5% of the total assets. A positive cash flow from operating activities was achieved in the amount of EUR 0.9 million (H1 2024: EUR – 5.1 million).

“Our strategy is focused on strengthening the leading position in mobile networks, growth in the Digital Society segment, and excellence in services and R&D. We base it on sustainable growth, market diversification and strengthening technology leadership. The focus is clear: innovation, competencies, persistence and resilience. Looking ahead, we are investing in new products, business segments and customers, AI which is necessary to accelerate innovation and drive internal efficiency, cyber security and the competencies of our employees in the domain of AI and digital transformation.“, concluded Gordana Kovačević, President of ENT Management Board.

Communications Ericsson Nikola Tesla