ZTE warned it expects to post a heavy net loss in the first half of 2018 as a result of the vendor’s recent trade battle with US officials.
In a preliminary statement issued to investors, the company noted the loss could total between CNY7 billion ($1 billion) and CNY9 billion, down from a profit of nearly CNY2.3 billion in the same period of 2017. The change represents a decrease of between 400 per cent and 500 per cent, it added.
ZTE attributed the drop to both its suspension of operations in the wake of a trade ban issued by US regulators and the $1 billion fine it agreed to pay as part of a deal which will let it resume trade with companies in the country.
The vendor is still working to close the deal, which also included stipulations it revamp its leadership structure and place an additional $400 million in an escrow account.
ZTE recently elected a new eight-member board and appointed a new company president. It paid the $1 billion fine in June, and the US Department of Commerce (DoC) confirmed earlier this week it signed an escrow agreement with ZTE.
The DoC said the trade ban will be lifted once ZTE deposits the $400 million into the account.