/cloudfront-us-east-2.images.arcpublishing.com/reuters/CO2CPDAF5BOJDGSPOXH45UEYFE.jpg "China's Huawei has announced a way to \"avoid crises\" as revenue soars")
© Thomson Reuters FILE PHOTO: The Viva Technology Startup and Innovation Conference takes place at the Porte de Versailles exhibition center in Paris.David Kirton
SHENZHEN, China (Reuters) - China's Huawei Technologies Co Ltd said it was "out of the crisis" after posting a modest increase in annual revenue, adding it had made progress on the replacement of sanctioned components thanks to billions of dollars. research
The tech conglomerate's revenue rose 0.9% in line with the company's guidance, suggesting some degree of stability has been achieved after another round of US export controls hit its once-smartphone business. strong in 2019.
But the company's net income was 35.6 billion yuan ($5.18 billion), down two-thirds from 2021, when the sale of Honor's mid-range smartphone business boosted profits. . However, this is also a sharp drop compared to 2020: a drop of 44%.
Chief executives of major suppliers of equipment used in 5G telecommunications networks spoke at a news conference about how they found themselves in a "tremendous impasse" and "found a solution" after Washington curtailed the supply of chips and equipment. American companies. .
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"2022 is the year we came out of crisis mode. We will go back to business as usual," said CFO Meng Wanzhou, daughter of the company's founder.
The US claims that Huawei poses a security risk, which it denies. Tensions with the United States led to Meng being detained in Canada for three years for attempts to cover up a Huawei-related company's attempts to sell equipment to Iran in violation of US sanctions.
The charges against Meng were dropped and he returned to China in 2021. Huawei's chairman changes every six months, and Meng will take over on Saturday.
INDUSTRY SUPPORT
R&D spending rose 13.2 percent year on year to 161.5 billion yuan ($23.5 billion), or a quarter of the company's revenue.
Such expenses help Huawei replace product components affected by US trade sanctions, Meng said. Founder Ren Zhengfei told the university in February that more than 13,000 parts have been replaced.
President Eric Xu said they are exploring areas such as green development as an opportunity and investing in 5.5 and 6 generation technologies with the hope that 5.5G products start being rolled out by 2025.
Asked about the latest views on the progress of electronic design automation tools for chips with 14-nanometer technology and above, Xu said the company has achieved this with its partners, which means that Huawei can use its own tools EDA for chips. project .
Like Huawei, China's semiconductor industry is subject to US export controls and the company will support the industry's efforts to become more self-reliant, it said, without elaborating.
Revenue by 2022 will be 642.3 billion yuan. While this represents moderate growth from 2021, it is still well short of the record 891.3 billion Yuan recorded in 2019, when the company became the world's largest Android smartphone vendor.
Business unit revenues increased 30%, telecommunications businesses increased 0.9% and consumer electronics sales increased 11.9%.
Huawei has an asset-to-liability ratio of 58.9% and a net cash balance of 176.3 billion yuan.
(1 dollar = 6.8714 Chinese yuan)
(Reporting by David Kirton; Additional reporting by Brenda Goh; Editing by Edwina Gibbs, Robert Birsel)
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