Ericsson Nikola Tesla, a leading Croatian provider of ICT solutions, reported a substantial 94.6 percent year-on-year increase in its consolidated net profit in the first nine months of 2023, reaching 20.5 million euros ($21.7 million).

CEO Gordana Kovačević noted that sales revenue recorded a slight increase year-over-year to 205.9 million euros, primarily driven by the continuous growth of services to Ericsson, which offset reduced revenue in domestic and other export markets.

In terms of total sales revenue, the domestic market accounted for 39.1%, services to the parent company Ericsson contributed 50.8%, and other export markets made up 10.1% of the total.

The gross margin increased to 14 percent, which is a notable improvement from the 9 percent reported in the same period last year, mostly due to changes in sales composition and a focus on operational efficiency and cost management.

The company achieved an operating profit of 24.7 million euros, marking an 81.7% year-on-year growth, primarily attributable to a significantly higher gross profit and the collection of compensation under the insurance policy covering political risks.

Selling and administrative expenses remained consistent year-on-year at 8.59 million euros, with their share in sales revenue remaining at the same level of 4.2 percent.

While cash flow from operating activities amounted to -2.4 million euros, in contrast to the positive 8.6 million euros reported in the first nine months of 2022, this change was attributed to customer payment dynamics and project implementation delays. Ericsson Nikola Tesla anticipates a return to positive cash flow by the year-end.

The company’s shares experienced a 4.35% increase, trading at 204 euros on the Zagreb Stock Exchange on Wednesday by 11 am local time, bourse data show.