Huawei’s working money stream dropped by greater than half final yr as US sanctions hampered the Chinese language expertise group’s potential to acquire vital parts.
The corporate generated Rmb35.2bn in money stream from operations in 2020, down 61.5 per cent from a yr earlier, at the same time as income grew barely by 3.8 per cent, Huawei mentioned on Wednesday. “Money stream is certainly somewhat decrease than final yr. That’s primarily due to the rising expenditure on the provision and R&D, and limitation on supplies,” Ken Hu, rotating chair, advised reporters and analysts.
That brings the corporate’s working money stream margin down to three.95 per cent, whereas its working money stream is its lowest since 2013, when income was lower than a 3rd of the Rmb891bn reported for 2020.
Internet revenue elevated by 3.2 per cent to Rmb64.6bn, the corporate mentioned.
“Huawei will not be an organization that’s in pursuit of excessive margins,” mentioned Shi Yanli, deputy chief monetary officer. She mentioned that the corporate’s focus in 2020 had been on “guaranteeing enterprise continuity” within the face of the Covid-19 pandemic, which had pushed up inner prices.
However she added that Huawei continued to stay to its technique of investing closely in analysis and growth. R&D expenditures have been greater than 15 per cent of income final yr.
One of many world’s largest distributors of telecom community infrastructure and smartphones, Huawei has been hit over the previous two years by US restrictions that bar American corporations from doing enterprise with it and severely restrict the power of semiconductor corporations worldwide to produce it with chips.
Pushed by a US-led marketing campaign to maintain Chinese language distributors out of significant infrastructure over safety issues, Huawei has additionally been locked out of the 5G markets of a rising variety of international locations.
In 2020, the primary full yr beneath the US sanctions, progress within the firm’s China enterprise offset a drop in income in all different areas. Income within the Americas contracted by 1 / 4, in Europe, the Center East and Africa by 12 per cent and in Asia-Pacific by 9 per cent, whereas gross sales in China elevated by 15 per cent, the corporate mentioned in its annual report. This raises the share of Huawei’s house market to greater than 65 per cent, a reversal of its previous world profile.
Whereas Huawei’s provider enterprise — its gross sales to telecom operators — was flat, the corporate mentioned its shopper enterprise grew by 3.3 per cent, making it the most important element at greater than half of general income. Hu mentioned that speedy progress of greater than 60 per cent in gross sales of devices comparable to related televisions, PCs and good watches had offset shrinking gross sales of its smartphones.
“In 2021, we’ve extra optimistic expectations concerning revenues from areas exterior China,” Hu mentioned.
Further reporting by Qianer Liu in Shenzhen