BUSINESS | Huawei reports profits, chip problem
Huawei, was able to pull in profits in 2021 with performance in line with the company’s forecast.
Guo Ping, Huawei rotating chairman. Source: Huawei
Despite revenue decline in 2021, in the midst of a global pandemic, China’s technology giant, Huawei, was able to pull in profits with performance in line with the company’s forecast.
“Our ability to make a profit and generate cash flows is increasing, and we are more capable of dealing with uncertainty,” said Meng Wanzhou, Huawei chief financial officer.
Huawei released its 2021 Annual Report on March 28th and revealed that the China-based company achieved CNY636.8B ($100.2B) in revenue in 2021, and CNY113.7B ($17.9B) in net profits, an increase of 75.9 percent year-on-year.
Huawei stated that “due to the enhanced profitability of its major businesses, the company’s cash flow from operating activities dramatically increased in 2021, amounting to CNY59.7B ($9.4B).”
For business groups, in 2021, Huawei’s carrier business generated CNY281.5B ($44.32B) in revenue. Third-party test results have found that 5G networks built by Huawei for customers in 13 countries, including Switzerland, Germany, Finland, the Netherlands, South Korea, and Saudi Arabia, provided “the best user experience.”
Huawei’s enterprise business generated CNY102.4B ($16.12B) in revenue during 2021. Huawei launched 11 scenario-based solutions for key sectors such as government, transportation, finance, energy, and manufacturing. The company also established multiple dedicated teams, including a Coal Mine Team, a Smart Road Team, and a Customs & Port Team, “to combine resources in a way that more efficiently serves the needs of its customers.” Over 700 cities and 267 Fortune Global 500 companies have chosen Huawei as their “digital transformation partner and Huawei now works with more than 6,000 service and operation partners around the world.”
Effects of sanctions
“Solving the chip problem is a complicated and long process that requires patience,” said Guo Ping, Huawei rotating chairman, in reference to the challenges his company has encountered due to US sanctions since 2019. “In the future, chip solutions may adopt a multi-core structure to improve chip performance.”
Huawei’s consumer business generated CNY243.4B ($38.32) in revenue in 2021 and continued to see steady sales growth in smart wearables, smart screens, true wireless stereo (TWS) earbuds.
“US restrictions have had a huge impact on Huawei, but despite such severe restrictions, thanks to the trust of our customers, Huawei’s main business in ICT infrastructure has remained stable while new business segments like digital power and cloud grew rapidly and its ecosystem development efforts have entered the fast lane,” said Jun Zhang, director of Huawei Asia-Pacific public relations department, during an interview with Philippine media. “In the context of accelerating digital transformation, there are strong market demands for innovative digital solutions and high-quality suppliers.”
“Asia Pacific including the Philippines are ripe with opportunities for digital transformation, and the pandemic has accelerated it. As 5G rolls out at scale, connectivity, cloud, AI, computing, and industry applications have all come together to create unprecedented opportunities for the ICT sector. Huawei will keep driving digital innovation for an inclusive Asia Pacific and leave no one behind,” the Huawei executive said.
