ZTE predicted it would report another profit in Q2 following its recent return to the black, as it looks to continue its recovery following 2018’s woes related to US trade sanctions.
The company confirmed a CNY860 million ($128.2 million) profit for Q1, toward the bottom end of previous guidance, and compared with a loss of CNY5.4 billion in Q1 2018. Operating revenue of CNY22.2 billion in the recent quarter was down 19.3 per cent from CNY27.5 billion.
Although Q2 is only weeks old, the company now said that for the six months to 30 June it expects to see a profit in the CNY1.2 billion to CNY1.8 billion range, although a big chunk of that has already been booked.
A profitable first half would represent a reversal from a loss of CNY7.8 billion in the same period of 2018, which was impacted by a $1 billion penalty imposed by the US, as well as operating losses and loss provisions related to the suspension of its business prior to this.
ZTE said that with regard to the first quarter, it “continuously strengthened its expense control and management, hence the decrease of selling and distribution costs compared to the same period last year”. It also said it had intensified R&D investment in 5G core areas, with costs for the quarter of CNY3.1 billion accounting for 13.9 per cent of operating revenue, up 4.1 points year-on-year.
The company said it had entered into 5G deals with 40 global operators.Subscribe to our daily newsletter Back