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The Chinese telecom giant is slowly but surely recovering from US trade restrictions. Huawei’s financial figures are not yet completely black. Stability is the keyword when presenting Huawei’s
The Chinese telecom giant is slowly but surely recovering from US trade restrictions. Huawei’s financial figures are not yet completely black.
Stability is the keyword when presenting Huawei’s annual results. After several years in which the company had to adapt to US trade restrictions, Huawei wants to look ahead again. Eric Zhu already lifted the “crisis mode” at the end of 2022 and the chairman repeated this statement during the press conference.
The annual results paint a cautiously positive picture of the company’s current situation. Starting with the bad news for Huawei. Net income and operating income plummeted in 2022. Huawei achieved net profit of 35.6 billion Chinese yuan, equivalent to about 4.75 billion euros, down almost two-thirds from 2021.
CFO Sabrina Meng, who takes over as chair on April 1, explains the drop in profits as a result of significant investments in the R&D department, which were thirteen percent higher. The sale of the Honor subsidiary brand in 2021 also affected the figures. But even compared to 2020, the first full year under trade restrictions, the gain is still 44 percent longer.
A more important figure is the peak of Huawei’s revenue, which rose slightly by 0.9 percent to 642.3 billion yuan (+/- 85.75 billion euros). It is the second year in a row that sales have stabilized again. Huawei’s best-performing division is the enterprise division, which includes the cloud business. That branch is up 30 percent, while the telecoms division has stagnated and the truncated consumer division has again declined 11 percent.
Huawei therefore intends to focus heavily on diversifying its product portfolio, as we learned recently during Mobile World Congress. But also because the consumer division is struggling to recover, Huawei’s earnings are a far cry from the record earnings of 2019, when it was still a top player in the smartphone industry. Then it took in 891.3 billion yuan, nearly 120 billion euros.
What should we conclude from Huawei’s annual results? The Chinese telecom giant seems to be slowly but surely emerging from the bottom, but the heyday of yesteryear has not yet returned. Sabrina Meng describes metaphorically that the company is thriving again after a long, cold winter.
Source: IT Daily
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