Growth in 4G infrastructure and device sales, alongside ongoing improvements in contract profitability and financial expense control, enabled ZTE to report a sharp increase in profit for 2014, the company confirmed today.
In line with earlier guidance, it announced a net profit attributable to shareholders of CNY2.63 billion ($423.88 million), increased 93.99 per cent year-on-year, on revenue of CNY81.47 billion, up 8.29 per cent year-on-year.
After extraordinary items, the profit attributable to shareholders was CNY2.07 billion, compared with CNY73 million in 2013.
Revenue from China increased by 13.88 per cent year-on-year to CNY40.58 billion, accounting for just under half of total operating revenue. International revenue increased by 3.26 per cent to CNY40.89 billion, with weakness in Asia offset by growth in Africa and Europe.
The company said it has formed “comprehensive partnerships with mainstream global carriers as it continued to focus on major populous nations and mainstream global carriers and bolster its competitiveness on all fronts while securing stable operations and quality growth”.
The company reported operating revenue of CNY46.77 billion for operator networks, up 14.92 per cent year-on-year. Operating revenue from telecoms software systems, services and other products decreased by 9.74 per cent to CNY11.59 billion, reflecting a decline in sales for international services.
It said that it “maintained relatively strong growth in the market created by the deployment of new 4G networks in [China} and elsewhere”, while in traditional 2G/3G markets, stable growth was achieved as it continued to optimise its market profile.
It also said that it had “achieved substantial progress in the preliminary research of 5G technologies and became the first industry player to introduce the pre-5G concept and conduct related field tests”.
Sales in ZTE’s handsets business increased by 6.52 per cent to CNY23.12 billion. The company said that in line with its “business philosophy of shifting to a more consumer-oriented and internet-driven approach”, it has optimised the distribution of its product types, with “special emphasis on the development of boutique models and flagship series”.
It said that smartphones continue to account for an increasing percentage of its total sales, underpinned by a “substantial increase in the percentage share of 4G handsets”.