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© tom_schmucker dreamstime.com Embedded | May 04, 2017

Enea: Increased financial significance of dispute with customer

Enea has initiated arbitration proceedings with one of the company's largest customers regarding how to interpret the provisions on royalty calculation.
This is in respect to the use of Enea's OSE operating system in this customer's telecommunications equipment. The dispute has subsequently extended to now also include a one-sided price reduction that the customer is introducing.

Based on the latest royalty report from the customer, the financial impact of the unilaterally introduced price cut is now growing. The discrepancy between agreed price and the lower price the customer unilaterally is applying, was previously of limited financial significance but now represents a negative difference of more than EUR 6 million in royalty for the second quarter of 2017 and is estimated to potentially reach between SEK 20 and 30 million (EUR 2.1 - 3.1 million) for the full year of 2017.

Enea expects the customer to pay in accordance with the agreement, but Enea "will otherwise have to initiate arbitration proceedings also for this part of the dispute", a press release reads.

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June 25 2017 8:55 PM V8.5.5-2