Ericsson Nikola Tesla 2Q 20 - Gross margin nosedived on sales mix change
Sales recorded a solid 10% advance despite the postponement of some projects due to travel restrictions and financial difficulties of some of the customers. The adverse impact was especially visible in export markets that recorded a -43% weaker yoy performance. The key growth driver was the Croatian market that doubled the revenues realized in 2Q 19, on the back of telcos investments in networks upgrades. Moreover, the managed services revenues for Hrvatski Telekom went up 114% yoy as the company took over the full range of the business at the beginning of the year. The revenues from the assignments for the Ericsson Corp. remained yoy flat. On the downside, the impact of the top line growth driven by the managed services on gross margin was much stronger than we expected, and this was also the main reason for the double-digit profit decline at all levels.
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