The Swedish telecommunications giant Ericsson has reported a 92 per cent fall in fourth-quarter net profit, blaming rising restructuring costs and lower sales as mobile operators cut spending on upgrading and expanding networks.
Net income slumped to 314 million kronor (Dh160.2m) from 3.89 billion kronor a year earlier, the company said yesterday. The world's largest maker of wireless equipment also said it would cut another 1,500 jobs.
Ericsson gave no outlook for the current year, but said that during last year, operators in a number of developing countries had been increasingly cautious with investments.
But markets including China, India and the US remained strong, and the market for professional services - such as maintaining and running operators' networks - was robust.
"During the second half of 2009, networks' sales were impacted by reduced operator spending in a number of markets," said Hans Vestberg, the chief executive of Ericsson. But Mr Vestberg said the company held its market share in all business segments and service demand remained strong.
The company launched a cost-cutting programme, which included 5,000 staff redundancies, in January last year and estimated restructuring costs of between 6bn and 7bn kronor. The programme is expected to be completed by the second quarter of this year.
Total annual savings of between 15bn and 16bn kronor are anticipated, with total restructuring costs of between 13bn and 14bn kronor, plus the additional 1,500 job cuts announced yesterday. Ericsson had about 83,000 staff at the end of last year.
Restructuring costs in the fourth quarter increased sharply to 4.3bn kronor from 2.3bn kronor a year earlier. Those costs, together with falling sales, hurt net profit for the last quarter to the end of December.
Operating profit excluding restructuring charges and joint ventures fell to 7.5bn kronor from 9bn kronor in the same quarter a year earlier.
"The market is weak but one might have hoped for some recovery in Q4," said Michael Andersson, a senior analyst at the Finnish firm Evli Bank.
"They're saved by cost cuts and that will probably be the case in 2010, so it's in no way a disaster. But it's hard to see any trigger in this when sales are down so much."
Ericsson's rival, the France firm Alcatel-Lucent, reckons the market will be flat or grow a maximum of 5 per cent this year while Nokia Siemens Networks predicts no growth.
Along with other telecoms companies, Ericsson has in the past year suffered from slowing demand as the operators that buy its equipment spent cautiously in the economic downturn.
But service sales have been stable, in part because many customers have outsourced the management of their networks to better control costs.
Ericsson last summer won a seven-year contract to maintain the networks of the US-based telecoms group Sprint Nextel.
The company, based in Stockholm, has seen intense competition in its equipment business from vendors including Chinese rival Huawei Technologies, which in recent months has secured several network deals with European operators such as Norway's Telenor with its low prices and improved quality.
Ericsson's fourth-quarter operating profit, excluding loss-making joint ventures and restructuring costs, was 7.5bn kronors. Sales fell 13 per cent to 58.33bn kronor, against expectations for 60.1bn kronor.
Earnings before interest and taxes fell to 1.79bn kronor from 6.21bn, well below expectations of 4.76bn kronor.
* with Dow Jones and Reuters
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
Election pledges on migration
CDU: "Now is the time to control the German borders and enforce strict border rejections"
SPD: "Border closures and blanket rejections at internal borders contradict the spirit of a common area of freedom"
The bio
Favourite food: Japanese
Favourite car: Lamborghini
Favourite hobby: Football
Favourite quote: If your dreams don’t scare you, they are not big enough
Favourite country: UAE
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
SHAITTAN
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Where to buy art books in the UAE
There are a number of speciality art bookshops in the UAE.
In Dubai, The Lighthouse at Dubai Design District has a wonderfully curated selection of art and design books. Alserkal Avenue runs a pop-up shop at their A4 space, and host the art-book fair Fully Booked during Art Week in March. The Third Line, also in Alserkal Avenue, has a strong book-publishing arm and sells copies at its gallery. Kinokuniya, at Dubai Mall, has some good offerings within its broad selection, and you never know what you will find at the House of Prose in Jumeirah. Finally, all of Gulf Photo Plus’s photo books are available for sale at their show.
In Abu Dhabi, Louvre Abu Dhabi has a beautiful selection of catalogues and art books, and Magrudy’s – across the Emirates, but particularly at their NYU Abu Dhabi site – has a great selection in art, fiction and cultural theory.
In Sharjah, the Sharjah Art Museum sells catalogues and art books at its museum shop, and the Sharjah Art Foundation has a bookshop that offers reads on art, theory and cultural history.
The specs: 2017 Lotus Evora Sport 410
Price, base / as tested Dh395,000 / Dh420,000
Engine 3.5L V6
Transmission Six-speed manual
Power 410hp @ 7,000rpm
Torque 420Nm @ 3,500rpm
Fuel economy, combined 9.7L / 100km
Leaderboard
64 - Gavin Green (MAL), Graeme McDowell (NIR)
65 - Henrik Stenson (SWE), Sebastian Soderberg (SWE), Adri Arnaus (ESP), Victor Perez (FRA), Jhonattan Vegas (VEN)
66 - Phil Mickelson (USA), Tom Lewis (ENG), Andy Sullivan (ENG), Ross Fisher (ENG), Aaron Rai (ENG), Ryan Fox (NZL)
67 - Dustin Johnson (USA), Sebastian Garcia Rodriguez (ESP), Lucas Herbert (AUS), Francesco Laporta (ITA), Joost Luiten (NED), Soren Kjeldsen (DEN), Marcus Kinhult (SWE)
68 - Alexander Bjork (SWE), Matthieu Pavon (FRA), Adrian Meronk (POL), David Howell (ENG), Christiaan Bezuidenhout (RSA), Fabrizio Zanotti (PAR), Sean Crocker (USA), Scott Hend (AUS), Justin Harding (RSA), Jazz Janewattananond (THA), Shubhankar Sharma (IND), Renato Paratore (ITA)
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
FFP EXPLAINED
What is Financial Fair Play?
Introduced in 2011 by Uefa, European football’s governing body, it demands that clubs live within their means. Chiefly, spend within their income and not make substantial losses.
What the rules dictate?
The second phase of its implementation limits losses to €30 million (Dh136m) over three seasons. Extra expenditure is permitted for investment in sustainable areas (youth academies, stadium development, etc). Money provided by owners is not viewed as income. Revenue from “related parties” to those owners is assessed by Uefa's “financial control body” to be sure it is a fair value, or in line with market prices.
What are the penalties?
There are a number of punishments, including fines, a loss of prize money or having to reduce squad size for European competition – as happened to PSG in 2014. There is even the threat of a competition ban, which could in theory lead to PSG’s suspension from the Uefa Champions League.
2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, (Leon banned).
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
Yuki Means Happiness
Alison Jean Lester
John Murray
The Great Derangement: Climate Change and the Unthinkable
Amitav Ghosh, University of Chicago Press
Meydan race card
6.30pm: Baniyas (PA) Group 2 Dh125,000 (Dirt) 1,400m
7.05pm: Maiden (TB) Dh165,000 (D) 1,200m
7.40pm: Maiden (TB) Dh165,000 (D) 1,400m
8.15pm: Handicap (TB) Dh170,000 (D) 1,900m
8.50pm: Rated Conditions (TB) Dh240,000 (D) 1,600m
9.25pm: Handicap (TB) Dh175,000 (D)1,200m
10pm: Handicap (TB) Dh165,000 (D) 1,400m
