Huawei Profit Rises 76% on Asset Sales in 2021, But Revenue Skids

Huawei Technologies on Monday reported asset sale gains helped lift profit 76% in 2021, turning in its first set of results under chief financial officer Meng Wanzhou since she returned to China last year after nearly three years of detention in Canada.

In its biggest-ever annual gain, net profit rose to C¥113.7-billion (US$17.8-billion), the smartphone and telecommunications giant said. Last year’s surge, from just 3.2% growth in 2020, marked the impact of asset sales in the wake of US sanctions and weaker domestic consumer demand amid the coronavirus pandemic.

But revenue skidded 29% to C¥636.8-billion, in line with Huawei’s previous forecast in December.

The company attributes its profitability to “improved product portfolios and more efficient internal operations”, with a rise in net profit margin even with gains from the sale of its budget phone brand Honor excluded.

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“Despite a revenue decline in 2021, our ability to make a profit and generate cash flows is increasing, and we are more capable of dealing with uncertainty,” said Meng, speaking at a live-streamed event from the company’s Shenzhen headquarters.
Guo Ping, currently holding the rotating post of chairman at Huawei, said the performance was in line with its forecasts.

Huawei, a supplier of telecom networking gear and smartphone brand, has been struggling since Trump in 2018 launched a campaign to contain the company.

Last year Huawei logged 243 billion yuan in consumer business sales — almost 50 percent down from 2020.

Meng’s detention in Canada came just before the administration of former President Donald US Donald Trump imposed a trade ban on Huawei, citing national security concerns. The curbs barred the company from using Google’s Android for its new smartphones, among other critical US-origin technology.

The US sanctions, together with the coronavirus, have weighed on Huawei, prompting it to sell its midrange handset division, Honor, in November 2020. The company received its first payment for the deal in March 2021.

Huawei also sold its x86 server division around the same time.