Huawei posts strong growth across sectors, flat profit - Mobile World Live

Huawei posts strong growth across sectors, flat profit

31 MAR 2017

Chinese equipment vendor Huawei posted double-digit gains across its three business groups in 2016, with China and Asia Pacific leading the growth and its consumer unit seeing smartphone shipments increase 29 per cent.

The company’s net profit inched up only 0.4 per cent to CNY37.1 billion ($5.3 billion) last year (its slowest pace of growth since a profit decline in 2011), but revenue grew 32 per cent to CNY521.6 billion (slightly slower than a 35 per cent increase in 2015).

Its carrier group, by far its largest business unit, saw revenue increase 24 per cent year-on-year to CNY290.6 billion. The company attributed the growth to its focus on digital transformation and urging carrier customers to take advantage of opportunities in cloud, video optimisation and the emerging IoT space.

Huawei’s consumer business, which now accounts for 34.5 per cent of total sales, reported a 44 per cent increase in revenue to CNY179.8 billion, as smartphone shipments expanded by 29 per cent to 139 million units. Huawei, the third largest smartphone maker in the world, released the P9 line of high-end smartphones last year to boost margins and compete with rivals Samsung and Apple.

Its enterprise group, targeting key vertical industries, posted the fastest growth, with revenue increasing 47 per cent year-on-year to CNY40.7 billion.

Eric Xu, Huawei rotating CEO (pictured below), said the company “maintained its strategic focus and achieved solid growth. We will stay customer-centric and will support digital transformation in all industries to create value for our customers and to grow sustainably.”

He said its R&D spending reaching CNY76.4 billion in 2016, 14.6 per cent of total revenue and up 25 per cent from 2015.

Regional breakdown
China continued to be both Huawei’s main growth driver and largest market, with revenue growing 41 per cent to CNY236.5 billion and accounting for 45 per cent of total turnover.

EMEA, its second largest market, saw revenue increase 22.5 per cent to CNY156.5 billion, accounting for 30 per cent of revenue. Revenue in Asia Pacific increased 36.6 per cent to CNY67.5 billion. The region represented 13 per cent of its revenue last year.

The Americas posted 13.3 per cent growth, with revenue of CNY44.1 billion representing 8.5 per cent of Huawei’s turnover.

Sabrina Meng, Huawei’s CFO, said: “Huawei was operationally healthy in 2016, with ample cash reserves, a solid and sustainable capital structure and high resilience against risk. In 2017, we will continue to boost the efficiency and quality of our operations to ensure solid growth.”

At the top, deputy chairman Guo Ping will now become CEO after Xu’s 6-month tenure ends today.

Author

Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

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