Huawei profit plummets amid sanctions but sales rise

The tech giant said its annual revenue for 2022 reached 642.3 billion yuan (£75.55 billion), a 0.9% gain from the year before.

Huawei profit plummets amid sanctions but sales rise

Huawei has reported a nearly 70% decline in profit last year amid sanctions and pandemic challenges – but its enterprise sales rose as the Chinese technology giant sought to pivot into digital industries and reduce its vulnerabilities to US sanctions.

“While it’s true that we have considerable pressures ahead of us, we still see opportunities to grow a resilient business portfolio, a unique competitive edge, the trust of our customers and partners and have the courage to invest heavily in R&D,” Eric Xu, the outgoing rotating chairman of Huawei, said during a press conference Friday.

Huawei said on Friday its annual revenue for 2022 reached 642.3 billion yuan (£75.55 billion), a 0.9% gain from the year before.

The net profit for the year was 35.6 billion yuan (£4.2 billion), down 68.7% from 2021 amid pressures from the pandemic, US sanctions, an increase in commodity prices and a decline in the company’s consumer business, which mostly sells smartphones.

“The year 2022 is a year where Huawei pulled ourselves out of a crisis mode. US restrictions are now our new normal and we’re back to business as usual,” said Sabrina Meng, Huawei’s chief financial officer, who will become the firm’s rotating chairwoman from April 1.

Also known as Meng Wanzhou, she is the daughter of Huawei’s founder.

She was detained for nearly three years in Canada after her arrest on US charges over lying to Hong Kong banks about dealings with Iran in violation of trade sanctions.

Ms Meng was released under a deal with the US Justice Department that will dismiss the charges in exchange for her accepting responsibility for misrepresenting Huawei’s dealings with Iran.

Huawei, one of China’s first global tech brands, has been caught up between China-US tensions over technology and security.

American officials say the company is a security risk and might enable Chinese spying, an accusation Huawei denies.

The US has banned American firms from doing business with Huawei, cutting off the Chinese firm’s access to chips and software such as Google services for its smartphones.

The Shenzhen-headquartered telecommunications firm has since shifted its focus in 2022 to growing its corporate business by selling network gear and services to industries such as healthcare, manufacturing, transportation and mining to help them become more digital.

Huawei’s enterprise business revenues in 2022 grew 30% from a year earlier to 133.2 billion yuan (£15.67 billion). Its growth in 2021 was just 2.1%.

Revenue from its company’s consumer business, which sells smartphones, tablets and other devices, continued to decline, falling 11.9%.

Huawei was the world’s largest smartphone maker in 2020 but has since seen its global market share plunge after it lost its Android license and Google services.

Huawei is one of the world’s biggest spenders in research and development, devoting a record 161.5 billion yuan (£19 billion) in R&D spending in 2022, representing 25% of its total revenue.

Just over half of Huawei’s workforce of 207,000 employees work in R&D.

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