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Still facing US sanctions, Huawei reports 28.5% drop in annual revenue

Huawei released the company’s balance sheet for the last year and recorded, for the first time in 20 years, a drop in numbers largely as a result of the sanctions applied by the United States to the company, which continued to harm it.

During 2021, the Chinese generated revenue of US$99.9 billion (636.8 billion yuan), down 28.5% year-on-year. The company’s net profit, however, increased by 75.9% year-on-year to $17.86 billion (113.7 billion yuan).

Despite the decline, the company’s chief financial officer, Meng Wanzhou, says the company’s ability to “profit and generate cash flows is increasing and we are better able to deal with uncertainty,” she told a news conference at headquarters. from Huawei in Shenzhen.

US sanctions continue to challenge Huawei

In addition to US sanctions, which brought “continuity of supply challenges” to the company, Meng also cited slowing 5G demand in China as a reason for the drop.

During the administration of former US President Donald Trump, Huawei was placed on a list of “prohibited companies” in the country – the same that recently included Kaspersky – whose main objective is to list companies that should be restricted in terms of export of key components and software to national companies.

In this sense, the US administration focused on cutting off Huawei’s access to cutting-edge chips needed to manufacture the company’s smartphones and other types of hardware. As a result, Huawei’s global smartphone market share has dropped.

Apart from the impact on the company’s production: Huawei’s consumer division, which encompasses sales of smartphones and other products, earned US$38.24 billion (243.4 billion yuan) in 2021, a drop of nearly 50% year on year. about year.

In addition, the division that handles the sale of the telecom business also recorded a 7% drop in revenue year-on-year, or $44.23 billion (281.5 billion yuan).

To circumvent the sanctions, Huawei has invested heavily in the automotive industry and also in hiring new talent for research and development of new technologies – this last division, by the way, the company injected US$ 22.42 billion (142.7 billion yuan ) last year, up slightly from the US$22.29 billion (141.9 billion yuan) invested in 2020.

“Relying on talent, scientific research and an innovative spirit, we will continually increase investment to reshape our paradigms of fundamental theories, architecture and software, and build our long-term competitiveness,” said Guo Ping, Huawei’s rotating president, in a statement.

Via: CNBC

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