Ericsson unit expects US$720mn revenue in 2004

The Brazilian unit of Swedish equipment supplier Ericsson (Nasdaq: ERICY) expects 60% growth in gross revenue this year, billing 2bn reais (US$720mn) compared to 1.3bn reais in 2003, local daily Valor Econômico reported. Ericsson Brasil president Anders Runevad had projected 10% growth when he took command of the subsidiary in January. Despite accelerated mobile phone sales over the next few months, the company still limited its next projection to 30%. "It was a pleasant surprise," Runevad was quoted as saying. The unit is also "practically without debt" after company headquarters converted its debt of US$227mn reais into equity in August. At year-end 2003, the unit had reported total debt of about 500mn reais. Ericsson's mobile sales in Brazil have been limited to Sony-Ericsson models since 2000 when the two firms partnered, but Ericsson continues to work alone on infrastructure contracts to expand mobile operator networks. Runevad attributes sales in 2004 to the expansion of GSM mobile operators Claro and TIM, aside from business with CDMA mobile operator Vivo. Runevad also cited orders from newly launched Brasil Telecom GSM and from two operators, Telemig and Amazônia Celular, which migrated part of their network to GSM. The manufacturer will close its second consecutive year in the black following two years of losses. In this period, the sector saw a worldwide decline and Ericsson in particular had to restructure to grow again. In 2003, the company unit posted 83.7mn reais in profit, while net revenue was 675mn reais.