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Profits slump at Sony Ericsson

Swedish-Japanese phone maker Sony Ericsson announced on Friday fourth quarter net losses of €187 million ($247 million), as sales dropped 22 percent.

Profits slump at Sony Ericsson

The company reported a loss of €25 million in the three months to September, according to previously published figures, and a profit of €373 million in the 2007 fourth quarter.

Sales in the three months to December 2008 came to €2.91 billion, down 22 percent from a year earlier, said the joint venture between Japanese electronics giant Sony and Sweden’s Ericsson.

“The mobile telephone market has been very badly affected (by the global economic crisis) and, as expected, the fourth quarter was very difficult,” Sony Ericsson head Dick Komiyama said in a statement.

“We expect a further deterioration of the market in 2009, especially in the first quarter,” Komiyama added.

The company announced another cost cutting exercise to save €180 million, in addition to an earlier plan aimed at savings of €300 million.

For 2008, it had a net loss of €73 million after a net profit of €1.1 billion in 2007, with sales falling to €11.24 billion from €12.91 billion.

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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