Huawei’s revenue slides 29% as consumer business slows

The Shenzhen-based telecoms manufacturer said it is confident that its carrier and enterprise businesses will grow steadily

Huawei's first half revenue dropped an annual 29.4 per cent as the company's consumer business slowed due to mounting pressure from US authorities and concerns about the security of its 5G equipment.

The Shenzhen-based telecoms manufacturer earned 320.4 billion Chinese yuan ($49.6bn) in revenue in the first six months of this year, almost 133.6bn yuan less than the prior year period, the company announced on Friday.

The company did not disclose a profit figure, but said its net profit margin for the period was 9.8 per cent of sales.

“Despite a decline in revenue from our consumer business caused by external factors, we are confident that our carrier and enterprise businesses will continue to grow steadily," Huawei's rotating chairman Eric Xu said.

"Our aim is to survive and to do so sustainably ... we will do this by creating practical value for our customers and partners,” he added.

Huawei's consumer business contributed 135.7bn yuan to the unlisted company's revenue in the first half. However, it was down 120.1bn yuan, or 46.9 per cent on an annual basis.

In November, Huawei sold its Honor smartphone business to a Chinese government-backed consortium for an undisclosed amount. This led to a big drop in its consumer business segment's revenue, industry analysts said.

Sales in the company’s carrier business reached 136.9bn yuan in the first half, an annual drop of more than 14 per cent. Its enterprise business surged 18.1 per cent yearly to 42.9bn yuan.

The company, which employs nearly 200,000 people, has been engaged in a trade dispute with the US administration, which considers the company to be a national security threat. However, Huawei has repeatedly refuted claims that its products could be a threat.

“These have been challenging times and all of our employees have been pushing forward with extraordinary determination and strength,” said Mr Xu.

“We have set our strategic goals for the next five years … we will keep on innovating to help build a low-carbon, intelligent world," he added.

Huawei, which was among the top three smartphone manufacturers in the first half of last year, was the world's sixth-biggest phone maker with an 8 per cent market share in the first quarter of this year, according to Counterpoint Research.

Updated: August 7th 2021, 3:10 AM
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