Interference pattern

29 March 2017 By Liam Proud Follow @liamwardproud

Boss Borje Ekholm has new objectives to sort out the Swedish telecom-kit maker, whose stock has halved in value since mid-2015. Lifting depressed margins would be a challenge even for an outsider. It will be especially tricky given he sat on Ericsson’s board as it misfired.

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Ericsson’s annual general meeting of shareholders will be held on March 29 in Stockholm, Sweden.

The Swedish telecoms equipment maker said on March 28 that it will refocus its business for managed services, explore options for its loss-making media arm and take further writedowns, impairments and restructuring charges as part of a strategic revamp under chief executive Borje Ekholm, who took over in January.

The company said it would “explore strategic alternatives” for its media and cloud-infrastructure businesses, and take a writedown on intangible assets including capitalised development within its media and IT units in the first quarter of 2017. This will have an estimated impact on operating profit of 3-4 billion Swedish crowns ($340 million to $453 million).

Ericsson raised its 2017 estimate for restructuring charges to 6-8 billion Swedish crowns from 3 billion Swedish crowns as a result of a “planned higher pace in cost reductions”.

It also said that provisions of 7-9 billion Swedish crowns would be required because of “negative developments related to certain large customer projects”.

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