Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
Huawei published its annual revenue report for last year showing a $99.9 billion total. The figure is a 28.5% decline YoY mostly caused by US sanctions.
Huawei Technologies Co recently reported its first-ever yearly revenue decline in 2021, directly affected by US sanctions. However, the profits of the Chinese multinational tech corporation also surged during the same period, rising more than 75%. According to a recent statement from Huawei’s chief financial officer Meng Wanzhou, the increase resulted from deliberate efforts towards boosting profitability. Wanzhou said:
“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.”
In addition, Huawei’s surge in net profit also came by way of one-off gains derived from a product spinoff line. This spinoff line featured the tech giant’s budget smartphone business, as well as a server business. The total value of net profit for 2021 was 113.7 billion yuan.
Huawei Revenue Report
Also, Huawei’s gross revenue for last year was 636.8 billion Chinese yuan, or $99.9 billion – representing a 28.5% year-on-year decline. As earlier mentioned, the development also marks the first publicly-reported yearly decline in revenue.
The company’s annual report, released Monday, represents the first high-profile corporate event led by Meng since her return to China. The Huawei high-ranking executive had been fighting a nearly three-year extradition battle with the US in Canada. Meng faced a bank fraud case charge brought against her by US prosecutors while in Canada, but eventually reached an agreement. As part of the deal for the Huawei founder’s daughter to return to China, the Chinese government also had to make some concessions. This saw two long-standing Canadian detainees (over 1,000 days) in China also being released back to their home country. Upon her return, Meng made an address at a press conference at Huawei’s headquarters in Shenzhen.
US Incorporation of Huawei into “Entity List” Came with Ramifications for The Chinese Tech Giant
During Donald Trump’s tenure as US President, he put Huawei on the US Entity List, effectively banning American firms from exporting key components and software to the Chinese tech giant. By doing so, the Trump-led US government cut off Huawei from accessing the high-end chips required for smartphone manufacturing. This triggered a substantial global plunge in Huawei’s market share to around 41%.
As further developments unfolded, the US also branded Huawei a national security threat. In addition, the Western powerhouse implored other nations to desist from using Huawei’s telecom equipment for 5G mobile networks.
Huawei has maintained, and still does, that it is not a national security threat. The Chinese tech heavyweight spent 142.7 billion yuan on research and development in 2021. This figure is slightly higher than the 141.9 billion yuan spent on the same initiative a year earlier in 2020. As Huawei’s rotating chairman Guo Ping explained in a press release:
“Relying on talent, scientific research, and an innovative spirit, we will continuously increase investment to reshape our paradigms for fundamental theories, architecture, and software, and build our long-term competitiveness.”
Read other business news on Coinspeaker.