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TELECOM

Ericsson faces massive hit over joint venture

Swedish telecom group Ericsson said on Thursday it would book a charge of eight billion kronor ($1.22 billion) in the fourth quarter over its misfiring mobile chip venture ST-Ericsson.

Published: 20 December 2012 12:54 CET
Ericsson faces massive hit over joint venture

The company said it would not become the full owner of the joint venture, after semiconductor maker STMicroelectronics last week announced it would sell its half.

“The charge includes a writedown of assets to reflect the current best estimate of Ericsson’s share of the fair market value of the joint venture, as well as additional charges related to the available strategic options for the future of the ST-Ericsson assets,” the company said in a statement.

The implementation of those options accounted for around three million kronor of the charge, most of which would be spent next year, it said.

“Ericsson will continue to explore various strategic options for the future of ST-Ericsson assets,” the company added.

The mobile chip maker has never turned a profit since being formed in 2009, and has weighed on the bottom line of its struggling Swedish parent company, which in November said it would cut almost 10 percent of its workforce.

In the third quarter, ST-Ericsson made a loss of $190 million.

AFP/The Local/dl

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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.

Published: 11 April 2022 19:42 CEST
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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