Extraordinary items resulted in a near 20 per cent year-on-year drop in ZTE’s net income during the third quarter, a period in which it recorded only marginal growth in revenue, though the picture in the opening nine months proved brighter.
The Chinese vendor is still on the road to recovery following a devastating ban on its operations implemented by the US in early 2018. In a statement, it pointed to progress around a stable strategy during 2019, with a focus on “mainstream markets and products” along with improvements to the quality of its operations and optimisation of cost controls.
During the nine-month period, ZTE increased the “frequency of security assessment”, strengthening its process management and control, and increasing staff numbers.
It also emphasised its 5G credentials, noting it had secured 35 commercial contracts in major markets and conducted “in-depth” cooperation with more than 60 global operators by end-September, including those in its massive domestic market.
The vendor added it had completed more than 30 commercial deployments and trials of 5G transport networks, with 20,000 units of its end-to-end products shipped. Another highlight was the launch of its first compatible smartphone, the Axon 10 Pro 5G, in Northern Europe, Middle East and China, where ZTE claimed a market first.
R&D investment amounting to 14.6 per cent of revenue was up 1 percentage point on the first nine months of 2018.
During the third quarter, net income attributable to shareholders slipped 18.6 per cent year-on-year to CNY98 million ($13.9 million) when including extraordinary items, though without these the figure was up a whopping 370.7 per cent to CNY2.66 billion. Revenue of CNY19.6 billion was 1.55 per cent higher.
Over the opening nine months, net income of CNY710 million was 131.4 per cent higher when including the extraordinary items, and CNY4.1 billion without, up 156.9 per cent. Revenue of CNY64.2 billion was 9.32 per cent higher.Subscribe to our daily newsletter Back