Huawei’s Meng Wanzhou speaking at the launch of annual results
(Picture: Huawei)Chinese mobile and internet giant Huawei has suffered a nearly 30% drop in sales as US sanctions and crackdowns in countries including the UK and much of Europe weighed on the firm.
Sales fell 28% to $99.8 billion in 2021 but operating profits jumped by three-quarters to $17.1 billion.
The leap in earnings was helped by a large rise in margins from 36.7% in 2020 to 48.3% and a rise in one-off income, including from the disposal of two businesses.
Sales declined as governments across the West moved to ban or restrict the company from parts of national infrastructure.
The UK government gained powers in November last year to strip out Huawei telecoms equipment from the UK telecommunications network after intelligence and security concerns were raised by ministers.
Concerns had been raised about supposed links between Huawei and the Chinese state, which the company denies. These fears had earlier prompted the US to launch sanctions against the company in May 2019 under President Donald Trump, which were a particular blow to the firm’s mobile phone business.
Huawei acknowledged the “extremely challenging business environment” during the past three years and said “when the storm came, we chose to run headfirst into the rain”.
“While many have been watching to see whether Huawei might fall, we’ve maintained focus on creating value for our customers and working together with out ecosystem partners to foster shares success,” Huawei said.
The company has hiked investment in research and development to its “highest levels in the past 10 years”, with expenditure now representing more than 22% of sales – equivalent to $132.5 billion.
The publication of Huawei’s results saw Meng Wanzhou return to the public stage for one of the first times since she was released after years of detention in Canda.
Wanzhou, also known as Sabrina Meng, was arrested in Canada in 2018 and detained under house arrest due to an arrest warrant issued by the US.
The arrest prompted China to detain two Canadian citizens, who it accused of spying.
A deal between US President Joe Biden and his counterpart Xi Jinping led to the two Canadians and Meng being released on 25 September last year.
“The past four years, there have been tremendous changes in the world and in China,” Meng, who is the daughter of the Huawei founder Ren Zhengfei, said today. “In the few months that I’ve been back, I’ve been trying to catch up. I hope I will catch up.”
She has returned as deputy chairman and chief financial officer at Huawei. She briefly presented the company’s financial figures, stating that in 2021 Huawei had “come out of the blackout zone of adversity”.
“Our team has grown more united under heavy pressure over the past three years, and our strategy has been streamlined over the past three years,” she said. “In the future, we will continue investing in talent and research.”
