Huawei, the Chinese technology giant, has reported a decline in profit of almost 70% in 2022, according to its annual report.
The company attributed the decrease to sanctions imposed by the US and the impact of the pandemic, as reported first by AP.
A picture taken on February 28, 2023 shows Chinese manufacturer Huawei logo at the Mobile World Congress (MWC), the telecom industry's biggest annual gathering, in Barcelona.
Growth Revenue
Huawei's enterprise business, which sells network equipment and services to industries such as healthcare, manufacturing, transportation, and mining, however, reported growth in revenue by 30% in 2022, reaching 133.2 billion yuan ($19.4 billion). This was a significant improvement from its 2.1% growth in 2021.
Huawei's revenue in 2022 achieved 642.3 billion yuan ($93.5 billion), an increase of just 0.9% from the previous year. Its net profit for the year was 35.6 billion yuan ($5.2 billion), representing a drop of 68.7% from 2021.
This can be attributed to the pandemic, US sanctions, an increase in commodity prices, R&D spending, and a decrease in the company's consumer business, which mostly sells smartphones.
In 2021, Huawei reported a higher-than-usual profit of 113.7 billion yuan ($16.6 billion) due to the sale of its budget smartphone business, Honor.
"In 2022, a challenging external environment and non-market factors continued to take a toll on Huawei's operations", Eric Xu, Huawei's Rotating Chairman, said at the company's annual report press conference.
"In the midst of this storm, we kept racing ahead, doing everything in our power to maintain business continuity and serve our customers. We also went to great lengths to grow the harvest - generating a steady stream of revenue to sustain our survival and lay the groundwork for future development."
Sabrina Meng, Huawei's CFO, added that despite the substantial pressure in 2022, the company's overall business results were in line with its forecasts, noting that Huawei's financial position remains solid, with strong resilience and flexibility.
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US-China Tech Tensions
As one of China's first global tech brands, it is currently caught up in tensions between China and the US over technology and security. American officials have accused the company of being a security risk and possibly enabling Chinese spying, an allegation that Huawei denies.
In addition to prohibiting Huawei from selling its telecommunications equipment to US consumers and denying it access to chips and software like Google services for its handsets, the US has forbidden American corporations from doing business with Huawei.
In order to assist sectors to become more digital in 2022, Huawei turned its attention to expanding its corporate business through the sale of network equipment and services.
However, the company's consumer segment, which sells smartphones, tablets, and other gadgets, saw a further loss of 11.9% in revenue.
In the second quarter of 2020, Huawei was the biggest smartphone manufacturer in the world, but since losing its Google services and Android license, its market share has decreased globally.
Despite the challenges faced by Huawei in 2022, the company is committed to investing in R&D and growing a resilient business portfolio.
Related Article: US, China Tech War: Huawei Reports Flat 2022 Revenue Amidst US Sanctions
