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TELECOM

Ericsson reports profits slump

Swedish telecom firm Ericsson has reported a 30 percent slump in net profits for the first quarter 2010, after weak sales development.

Ericsson, which also was hit by big restructuring charges, said that weak conditions seen last year carried over into the first three months of this year.

“The market conditions we saw in the second half of 2009 prevailed also in this quarter with mixed operator investment behaviour across regions and markets,” chief executive Hans Vestberg said in a statement.

“Operators in a number of developing markets were still cautious with their investments,” he added.

The group posted a 30 percent drop in net profit to 1.26 billion kronor ($173 million dollars) for the first three months of the year, down from 1.72 billion for the same period of last year.

The result fell short of analysts’ estimates for 1.79 billion kronor, according to a poll by Dow Jones Newswires.

Meanwhile, sales fell nine percent over the period to 45.1 billion kronor from 49.6 billion. Financial analysts had forecast sales fell three percent to 47.8 billion kronor.

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SWEDEN AND UKRAINE

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.

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