Huawei posts record profit but US pressure, pandemic hit revenue

SHANGHAI: Chinese telecom giant Huawei said Wednesday it achieved the latest in a string of record profits last year, but revenue growth slowed sharply because of the pandemic and tightening US pressure that has pushed it into new business lines to survive.

Unlisted Huawei said net profit rose 3.2 percent to 64.6 billion yuan ($9.9 billion) in 2020, while revenue inched 3.8 percent higher to 891.4 billion yuan.

The world's leading supplier of telecom networking gear and a top smartphone brand, Huawei faces uncertainty since the administration of former president Donald Trump launched a campaign in 2018 to contain the company.

The American pressure has taken time to impact the bottom line, but the results unveiled Wednesday clearly showed that they were biting.

Bloomberg News said its calculations showed that Huawei's revenue in the fourth quarter of 2020 shrank for the first time on record. Huawei representatives could not immediately confirm that.

Before the US campaign began, revenue growth was routinely in excess of 30 percent. It slowed to around 19 percent in 2019.

"It's fair to say that in 2020 we saw a slowdown in the growth rate and yes, life was not easy for us," chairman Ken Hu said during a briefing at Huawei's sprawling campus in the southern city of Shenzhen.

The earnings report also indicated that Huawei may increasingly find its fortunes tied to the huge China market as overseas pressure mounts.

While revenue in China grew 15.4 percent last year, it dropped 24.2 percent in the US market, 12.2 percent in Europe, Middle East and Africa, and 8.7 percent in the Asia-Pacific region.

Smartphone sales also have stalled after the US cut Huawei off from key components and banned it from using Google's Android services.

Huawei said the unit that makes smartphones and other personal devices, and which accounts for more than 50 percent of overall revenue, managed just 3.3 percent sales growth in 2020.

Data released previously by independent sector analysts has shown that both domestic and overseas Huawei phone shipments plunged more than 40 percent in the fourth quarter of 2020.