4G drives 43% profit growth for ZTE – Mobile World Live

4G drives 43% profit growth for ZTE

21 JUL 2015

ZTE said that 4G growth gave a strong boost to both profit and revenue in the first half of 2015.

According to preliminary results released today, the company is expecting first half profit attributable to shareholders of CNY1.61 billion ($259.69 million), up 42.96 per cent year-on-year, on revenue of CNY45.94 billion, up 21.86 per cent.

In a statement, the Chinese equipment vendor said that faster progress in domestic 4G projects, as well as increased investment in wireline switch and access systems, contributed to growth in revenue and profit.

While China’s 4G market has initially been driven by TD-LTE rollouts, ZTE noted strength for FDD-LTE equipment in its home market (in February number two and three operators China Unicom and China Telecom were finally awarded FDD licences).

It also said that contract profitability improved in-line with the “expanding scale” of international 4G projects.

The company noted an increase in R&D costs as a percentage of operating revenue, which was “mainly attributable to the ongoing increase in the group’s R&D investment in products such as LTE, bearer network, SDN and GPO, to support long-term development”.

In contrast, selling and distribution costs and administrative expenses as a percentage of operating revenue decreased year-on-year “following enhanced cost management by the group”.

The positive results come shortly after country-mate Huawei also reported strong sales growth in the first half of 2015.

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Steve Costello

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