Huawei stands steadfast despite 69 percent decline in profit

Chinese telecommunications giant, Huawei, reports a nearly 69% decline in net profit in 2022, hopes for a better bloom in 2023.
In a press conference given on Friday March 31, 2023, the top management of the company indicated that in its operation in 2022, the tech giant generated CNY 642.3 billion in revenue and CNY 35.6 billion profits ($5.18 billion), down 69% from 2021, despite pressure from the pandemic, U.S. sanctions, higher commodity costs, more R&D spending, and a decline in the company’s consumer business, which mostly sells smartphones. With the sale of Honor, its low cost smartphone division, Huawei made a higher than average profit of 113.7 billion yuan ($16.6 billion) in 2021.
“In 2022, a challenging external environment and non-market factors continued to take a toll on Huawei operations,” said Eric Xu, Huawei Rotating Chairman, at the company’s annual report press conference adding, “In the midst of this storm, we kept racing ahead, doing everything in our power to maintain business continuity and serve our customers. 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.”
According to Xu, 2023 may be important for Huawei’s survival and expansion. “Plum flower sweetness tends to increase in a cold, severe winter. At now, Huawei looks like a plum blossom. Even if we are under a lot of pressure, we have what it takes to thrive because of our growth prospects, steady business portfolio, and completely unique competitive edge, the belief of our clients and partners, and courage to spend a lot of money on R&D. We have faith in our ability to succeed in whatever task set before us and lay the groundwork for our long-term survival and expansion.”
Huawei says it will continue to grow its research and development spending, bringing its total over the previous ten years to more than CNY 977.3 billion in 2022 with an annual investment of CNY 161.5 billion representing 25.1% of the company’s revenues.
The company has persisted in expanding its platform capabilities through its Harmony OS, Kunpeng, Ascend, and cloud portfolios, with a focus on improving the developer experience and enabling and assisting its environment partners on all fronts. In order to support environmentally-based innovation and provide more value for its customers, Huawei currently collaborates with over 40,000 environmental partners and over 9 million developers.
Sabrina Meng, Huawei’s CFO said that the overall business performance in 2022 were in line with predictions, “while under a lot of pressure. At the end of 2022, our liabilities ratio was 58.9% and we had CNY 176.3 billion in net cash. The total value of our assets also reached one trillion yuan, with the vast bulk of that sum consisting of current assets including cash, short-term investments, and operating assets. Our financial situation is still solid, adaptable, and remarkably resilient.”
Founded in 1987, Huawei is a leading global provider of information and communications technology (ICT) infrastructure and smart devices. We have 207,000 employees and we operate in more than 170 countries and regions, serving more than three billion people around the world.

The post Huawei stands steadfast despite 69 percent decline in profit appeared first on Capital Newspaper.

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