© Reuters. FILE PHOTO: A Huawei Technologies logo is seen in its exhibition space, at the Viva Technology conference dedicated to innovation and startups at the Porte de Versailles exhibition center in Paris, France, June 15, 2022. REUTERS/Benoit Tessier=
By David Kirton
SHENZHEN, China (Reuters) – China’s Huawei Technologies Co Ltd said net profit slumped last year as the tech conglomerate increased spending on research and development and grappled with rising material costs.
But revenue rose 0.9%, in line with a company prediction, suggesting Huawei has reached some level of stability after successive rounds of US export controls hit its once-mighty business. of smartphones.
It posted a net profit of 35.6 billion yuan ($5.2 billion), about two-thirds less than in 2021, when profit was boosted by the sale of its Honor mid-range smartphone business. However, the decline was severe even compared to 2020: a 44% drop.
“In 2022, a challenging external environment and non-market factors continued to affect Huawei’s operations,” Eric Xu, Huawei’s rotating president, said in a statement.
“In 2023 and the years to come, sustainable survival and development will remain a strategic focus for Huawei. Plum blossoms tend to become sweeter due to the frost of a harsh winter. Today, Huawei is like a plum blossom.” , said.
Huawei, a major supplier of equipment used in 5G telecommunications networks, has been subject to US export controls since 2019, restricting its supply of chips and chip design tools from US companies.
Washington has said Huawei poses a national security risk, a charge the company denies. Tensions with the US also led to Meng Wanzhou, CFO and daughter of the company’s founder, being detained for three years in Canada for alleged attempts to cover up attempts by Huawei-linked companies to sell equipment to Iran in violation of US sanctions subsequently dismissed the charges against Meng.
Revenue for 2022 was 642.3 billion yuan. While that represented moderate growth during 2021, it was still well below the record 891.3 billion yuan recorded in 2019, when it was the top Android smartphone provider globally.
By segment, revenue from the company’s business division, which includes business-to-business industrial projects, soared 30%. Revenue from its telecommunications business rose 0.9%, while sales from its consumer electronics business fell 11.9%.
Research and development spending increased 13.2% to 161.5 billion yuan, equivalent to a quarter of the company’s revenue, Meng said.
Huawei’s asset-liability ratio was 58.9% and it had a net cash balance of 176.3 billion yuan.
“Our financial position remains strong, with strong resilience and flexibility,” said Meng, who will become the company’s president on April 1. Huawei rotates its president every six months.
($1 = 6.8646)
