Currency headwinds wipe out Ericsson's sales gain
STOCKHOLM : Swedish telecommunications equipment manufacturer Ericsson said today that it swung into profit in the second quarter (Q2), but the strong krona wiped out sales gains.
The company, a pioneer in building the equipment that run mobile phone networks along with Finnish rival Nokia, said it earned a net profit of SEK4.6 billion (US$479 million) in Q2 compared to a US$1.0 billion loss in the same period last year due to writing down the value of a US investment.
However, net sales, which were converted into Swedish krona, slid 6% to SEK56.1 billion.
The SEK3.7 billion drop in revenue was less than the estimated SEK4.7 billion impact from the higher value of the krona relative to other currencies, in particular the US dollar.
While investors are looking at how companies are coping with the US tariffs, the drop in the value of the dollar versus most currencies is also putting pressure on firms.
'It is encouraging that Americas' growth continues, and that Europe has stabilised,' Ericsson chief executive Borje Ekholm said.
Sales in the Americas region – Ericsson's largest market – were flat in krona terms but rose 10% when correcting for currency effects and discontinued business.
European sales dipped 1% after stripping out currency fluctuations and other changes.
Meanwhile the company said its adjusted operating profit hit a three-year high due cost-cutting measures.
'We have structurally lowered our cost base and are strongly focused on delivering further efficiencies,' said Ekholm.
Ericsson shares shed more than 3% in morning trading in Stockholm, and are down more than 17% from the start of the year.
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Malay Mail
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However, accelerating growth in sales to domestic car brands in China partially offset this Europe, the Middle East and Africa ("EMEA"), sales increased by 2%. Sales of products for braking, oil pump, steering, engine and fuel management applications increased, partially offset by decreased sales of products for closure and vision the Americas, sales decreased by 4%. Sales of products for braking, oil pump and engine and fuel management applications decreased due to the phasing out of some programs and weak demand from certain customers. This decline was partially offset by increased sales of powder metal sales for the three months ended 30 June 2025 were US$150 million, an increase of US$2 million or 2% compared to the same period in the previous financial year. Excluding currency effects, IPG's sales increased by US$1 million or 1%. 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In the short term, this is likely to be a drag on sales, though we remain encouraged by our pipeline of new product launches and new business developments that should underpin growth in the second half of the financial year".The Company today announced that the Group entered into two equity joint venture agreements with Shanghai Mechanical & Electrical Industry Co., Ltd. ("SMEIC") in relation to the formation of two equity joint first joint venture will be incorporated in Shanghai which will primarily serve as a sales channel for products manufactured by the second joint venture, as well as support business development, research and development, application engineering, and customer service for humanoid robotic solutions in the People's Republic of China (''PRC''). The second joint venture will be incorporated in Shenzhen which will serve as the engineering design, research and development, and manufacturing base for humanoid robot hardware modules and hardware system integration solutions. Each of the Group and SMEIC will invest RMB75 million in the two joint is a leading PRC-based electromechanical equipment manufacturing company and is listed on the Shanghai Stock Exchange."The two joint ventures are structured to complement one another - combining sales, business development and customer application support with product design, engineering, and manufacturing expertise. Together, they will enable the end-to-end delivery of high-performance humanoid robotic core components and subsystems to customers across the PRC.", said, Austin Wang, Executive Vice President. "The formation of the joint ventures represents a significant milestone in the Group's long-term strategy to expand its presence in the robotics sector."This news release contains forward-looking statements regarding the financial condition, results of operations, and business plans of Johnson Electric and its Group, including the formation of joint ventures and the Group's outlook for the full year. These statements are based on current expectations, unaudited internal records, and management accounts, which have not been reviewed or audited by the Company's auditors and are subject to risks and statements can be identified by words such as "outlook", "expects", "anticipates", "intends", "plans", "believes", "estimates", "projects", and similar expressions. Such statements are subject to known and unknown risks and uncertainties, and actual results may differ materially from those expressed or implied in these and potential investors are advised to exercise caution when dealing or investing in the shares of the #JohnsonElectric The issuer is solely responsible for the content of this announcement. About Johnson Electric Group The Johnson Electric Group is a global leader in electric motors, actuators, motion subsystems and related electro-mechanical components. It serves a broad range of industries including Automotive, Smart Metering, Medical Devices, Business Equipment, Home Automation, Ventilation, White Goods, Power Tools, and Lawn & Garden Equipment. The Group is headquartered in Hong Kong and employs over 30,000 individuals across more than 20 countries worldwide. Johnson Electric Holdings Limited is listed on The Stock Exchange of Hong Kong Limited (Stock Code: 179). For further information, please visit:
Malay Mail
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