Huawei reports huge drop in profits as US sanctions bite – The Online Citizen Asia
SHENZHEN, CHINA — Huawei’s profits fell almost 69 per cent last year, the company said Friday, as US sanctions and international economic uncertainty bit into the Chinese tech giant’s earnings.
The company generated 35.6 billion yuan ($5.2 billion) in net profit in 2022, it said, down 68.7 per cent from a record 113.7 billion last year.
“In 2022, a challenging external environment and non-market factors continued to take a toll on Huawei’s operations,” the company’s rotating chairman Eric Xu said at an annual report press conference.
“In the midst of this storm, we kept racing ahead, doing everything in our power to maintain business continuity and serve our customers,” he said.
“We also went to great lengths to grow the harvest –- generating a steady stream of revenue to sustain our survival and lay the groundwork for future development.”
Speaking on the fall in profits, company CFO Meng Wanzhou, daughter of billionaire CEO and founder Ren Zhengfei, described the results as a “low point in Huawei’s history.”
“US restrictions are our new normal,” she said, adding that the company was moving “back to business as usual.”
“In times of pressure, we press on –- with confidence.”
Blocked in major markets
A leading supplier of telecom gear, smartphones and other advanced equipment, a US-led pressure campaign in recent years has taken a major chunk out of Huawei’s businesses.
Its 5G gear has been blocked in major markets including the United States, Britain and Japan over security concerns.
Huawei has denied allegations that its equipment carries risks of sabotage and spying.
Once the world’s top smartphone maker, the company has seen sales slump after the United States cut off access to key parts and barred it from using Google’s Android operating system.
Huawei has moved to diversify revenue streams in the face of that pressure, moving into the cloud computing sector with an aim to invest in data centres around the world.
It has also focused on offering consumer tech such as smartwatches in addition to phones, as well as boosting its footprint in the auto sector as a supplier.
The company did not provide details about its net profit or a breakdown of figures from its various divisions.
Huawei is not publicly listed and its accounts are not subject to the same audits as companies traded on the stock market.