ERICSSON ANNOUNCES 44% FALL IN NET PROFITS FOR THE FIRST HALF YEAR.

The Swedish telecommunications giant Ericsson, currently embarked upon an extensive restructuring programme against the background of its on-going battle for market domination with its Finnish rival Nokia, has announced a 44% decline in pre-tax profits for the first six months of 1999 - a year of transition - from 7.571 billion Swedish Krones to SKr4.258 billion (Euro 486 million). Turnover has meanwhile risen 12% from SKr82.250 to 92.383 billion, while operating profits are down 36% to SKr5.162 billion. The profit figure is at the lower end of market forecasts anticipating a pre-tax profit of between SKr4.24 and 5.47 billion. The group has attributed the decline to smaller margins on consumer products, restructuring costs (SKr600 million) including the shedding of 14,800 jobs over the next two years, 8,800 in 1999, and a SKr1.3 billion contingency fund. This "negative trend" has been a major concern for the Board which recently appointed Kurt Hellstroem to be the Ericsson's new General Manager, in place of Sven-Christer Nilsson, dismissed on July 7.Ericsson is anticipating a decline in pre-tax profits in 1999, but expects results to recover strongly in 2000 with a profit in excess of the figure for 1998. On July 22, the Finnish group Nokia, which has toppled Ericsson from its position at the top of the global mobile telephone market, announced a 75% improvement in pre-tax profits to Euro 1.635 billion. The 40% turnover growth of Ericsson's mobile systems division and forecasts of a...