Huawei Profit Sinks In 2022 Amid Sanctions But Sales Higher

Huawei Profit Sinks In 2022 Amid Sanctions But Sales Higher

HONG KONG - Huawei on Friday reported a nearly 70% drop in profits last year due to sanctions and fears of an invasion, but the company's sales rose as the Chinese tech giant went digital and reduced its exposure to US sanctions.

“Despite intense pressure to expand our portfolio of sustainable businesses, we continue to see a unique competitive advantage, the trust of our customers and partners and the courage to invest heavily in Rn. &D," Huawei president Eric Xu said in a press release.

Huawei's revenue will reach 642.3 billion yuan ($93.5 billion) in 2022, up 0.9 percent from a year ago.

Annual net profit was 35.6 billion yuan ($5.2 billion), down 68.7% from 2021, due to the epidemic, US sanctions, rising commodity prices and pressure. &D, as well as the decline in the company's consumer business, which primarily sells smartphones. Huawei in 2010 earned 113.7 billion yuan ($16.6 billion) in sales of Honor's budget smartphone units in 2021.

"2022 is the year Huawei comes out of the crisis. The US ban has become our new normal and we're back to business as usual," said Sabrina Meng, Huawei's CFO.

Meng, also known as Wanzhou, is the daughter of Huawei's founder and will be the company's president from April 1, in charge of Huawei's affairs for six months.

Meng has been jailed for three years in Canada on charges of lying to US banks in Hong Kong about deals with Iran in violation of trade sanctions. He was released in a plea deal with the US Department of Justice, where he was accused of misrepresenting Huawei's ties to Iran.

Huawei, one of China's global technology brands, has been embroiled in the technology and security conflict between China and the United States. US officials have said the company poses a security risk and could facilitate Chinese espionage, but Huawei has denied the allegations.

The US has banned American companies from working with Huawei, sourcing chips and software such as Google's phone services, and selling the company's telecommunications equipment to American customers.

In 2022, the Shenzhen-based telecommunications company is focusing on growing its corporate business by selling network equipment and services to sectors such as healthcare, manufacturing, transportation and mining.

So far, those efforts seem to have paid off. Huawei's 2022 business revenue grew 30 percent year-on-year to 133.2 billion yuan ($19.4 billion). In 2021, growth was only 2.1%.

Revenue from the company's consumer business, which sells phones, tablets and other devices, continued to decline, down 11.9 percent. In 2020, Huawei was the world's largest smartphone manufacturer, but its global market share fell after losing the Android license and Google services.

Huawei is one of the world's largest R&D financiers in 2010, accounting for 25% of revenue, with a record expenditure of 161.5 billion Yuan ($23.5 billion) by 2022.

More than half of Huawei's 207,000 employees work in Russia. &D. Company R According to Meng, A&D's efforts have helped Huawei replace components that the company could not obtain due to US sanctions.

President Xu said on Friday that Huawei and its partners have made progress in automating chip development in electronic equipment beyond 14 nanometers, and this progress will enable the use of chip development equipment.

The discovery comes as the Chinese government seeks to push technological autonomy amid tensions with the United States.

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