28.9% Drop In Its 2021 Revenue Expected By Due To US Sanctions

Huawei, the Chinese telecoms giant, stated on Friday that sales for this year will be 634 billion yuan ($99 billion), down 28.9% from the previous year.

Sanctions imposed by the United States, a semiconductor scarcity, and a global decline in smartphone demand have all harmed the company.

Huawei’s revenue for the second half of the year fell to 313.6 billion yuan from 320.4 billion yuan in the first half of the year, according to the full-year forecast for 2021.

In 2020, the company reported revenue of 891.4 billion yuan, up 3.8 per cent compared to the same period the previous year. This is far slower than the 19.1% year-on-year increase in revenue announced for 2019, which totaled 858.8 billion yuan.

The announcement came as part of Huawei Rotating Chairman Guo Ping’s internal New Year’s greeting, in which he urged staff to keep going.

While not making clear any reason for the drop in expected revenue, the letter noted that “serious challenges” from “an unpredictable business environment, the politicization of technology, and a growing deglobalization movement,” according to an English-language version if e document.

Guo added that “this past year, our carrier business remained stable, our enterprise business experienced solid growth, and our device business expanded swiftly into new business domains.”

Guo stated that the firm’s goals for the coming year comprise of boosting efforts for developing and attracting people, as well as developing automotive-related technologies.

Huawei stated last week that sales of the first electric car powered by its HarmonyOS operating system will likely begin in late February.

In March, Huawei usually issues a more extensive annual report.

The two major business divisions, consumer and carrier, both witnessed steep year-on-year reductions, according to data published for the first half of 2021. Huawei’s enterprise business, which has become a key part of the company’s growth plan, increased by 6.6 billion yuan.

Former President Donald Trump’s administration placed Huawei on a national security blacklist in 2019, preventing American firms ffrom supplying technology to the Chinese firm. Huawei has denied posing a threat in this way.

Other conflicts between Huawei and the US government have calmed, despite the limitations.

After reaching an agreement with the US authorities over wire fraud accusations, CFO Meng Wanzhou, the daughter of founder Ren Zhengfei, returned to work at the company’s headquarters in Shenzhen this October.

Meng had opposed extradition to the United States since her detention in Vancouver in December 2018. She was under house arrest for most of the last three years, with her 10 million Canadian dollar ($7.9 million) bail terms allowing her to go out during the day with security tracking.

(Adapted from CNBC.com)



Categories: Economy & Finance, Entrepreneurship, Geopolitics, Regulations & Legal, Strategy, Sustainability, Uncategorized

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