Huawei has also entered China’s booming EV industry by launching vehicles in partnership with Seres.
Chinese technology corporation Huawei posted its biggest annual drop in profit in 2022. The company said it had never experienced a drop in annual profit like last year. According to Huawei, the annual drop in profits was due to strict pandemic controls in China that affected many companies. In particular, Chinese companies from different sectors felt the impact of US sanctions and control measures as a result of the coronavirus pandemic.
Huawei sees lowest drop in annual profit
According to the manufacturing company, annual profit fell 69% year-on-year to 35.6 billion yuan (5.18 billion U.S. dollars). These numbers are the lowest since 2011, when the company fell 54% year-over-year. In particular, the sale of the Honor smartphone brand added to the manufacturer’s big profit in 2021. In addition to the pandemic controls and US sanctions, Huawei blamed the increase in prices of raw materials and the increased spending on research and development due to the huge annual decline in profits.
Speaking at the company’s annual report press conference, Huawei Rotating Chairman Eric Xu, noted:
“In 2022, a challenging external environment and non-market factors continued to affect Huawei’s operations. In the midst of this storm, we forged ahead, doing everything in our power to maintain business continuity and service our customers. We also did our best to grow the crop, generating a steady stream of income to maintain our survival and lay the foundation for future development.”
The company’s chief financial officer, Sabrina Meng, said overall business was in line with forecasts despite declining annual profits. The CFO stated that the liability ratio was 58.9%, while the net cash balance was 176.3 billion yuan. She mentioned the total asset balance that reached 1 trillion yuan, stating that Huawei’s financial position remains “solid with great resilience and flexibility.” Revenue in 2022 added 0.91% to 642.3 billion yuan.
Emphasizing its strength even after posting its most significant annual profit decline on record, Xu said Huawei would see sustainable survival and development in 2023. He added:
“While it is true that we have considerable pressure ahead of us, we have what it takes to get ahead: with opportunities for growth, a resilient portfolio of businesses, a unique competitive advantage, the enduring trust of our customers and partners, and the courage to invest heavily in R&D. We are confident in our ability to overcome any challenge that comes our way, laying a solid foundation for sustainable survival and development.”
Huawei has also entered China’s booming EV industry by launching vehicles in partnership with Seres. The Aito M5 was built with Huawei’s HarmonyOS operating system. The tech company said its “Intelligence Automotive Solutions” raised 2.1 billion yuan last year.
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Ibukun is a crypto/finance writer interested in conveying relevant information, using non-complex words to reach all kinds of audiences. In addition to writing, he enjoys watching movies, cooking, and exploring restaurants in the city of Lagos, where he resides.
