Huawei Posts Sharp Decline in 1H21

Huawei revealed a deepening decline in earnings during the first half of 2021. Trade restrictions continued to pressure consumer division and a delay in a Chinese 5G network contract led to a double-digit decline in revenue in carrier division.

Revenue fell 29.4 percent year-on-year to CNY320.4 billion ($49.5 billion). Net profit margin rose to 9.8 percent from 9.2 percent in 1H20, highest since US sanctions were imposed in March 2019. Carrier Network Business Group revenue fell 14.2 percent to CNY136.9 billion, attributed to China Mobile delaying its 700MHz 5G tender to mid-July. Huawei won 60 percent of the contract and without the delay would have grown revenue at the division.

Consumer Business Group sales fell 47 percent to CNY135.7 billion due in large part to the loss of its Honor device unit. Enterprise business revenue grew 18.2 percent to CNY42.9 billion on increased uptake of digital services and growth in its cloud business.

“Despite a decline in revenue from our consumer business caused by external factors, we are confident our carrier and enterprise businesses will continue to grow steadily. Our aim is to survive, and to do so sustainably,“ rotating chairman Eric Xu said in a statement, adding the results were in line with forecasts. Xu acknowledged Huawei faced challenging times, but stated it continues to believe deeply in the power of digital technology to provide fresh solutions to the problems the world is facing right now. Over the past three years, the company invested nearly 15 per cent of annual revenue on R&D, with the amount to rise without any major changes to its focus, the company stated.