Huawei’s annual revenue in 2021 was lower than in 2020, but profits increased by more than 75%
This is the first time the Chinese company has lost annual revenue due to US sanctions, but the budget saw a dramatic increase in profits thanks to smartphone brand sales and the server business.
“Despite the decline in revenue in 2021, our profitability and cash flow have increased, despite the decline in revenue,” Huawei’s CFO Meng Wanzhou told a news conference, referring to the company’s annual report, We are now more capable of overcoming uncertainty
Meng Wanzhou is thought to have returned to China in October last year after nearly three years of fighting a legal battle against US deportation in Canada over fraud allegations.
The company’s revenue in 2021 decreased by 28.5% over the previous year and stood at 636.6 billion yuan. In contrast, profits rose 75.9 percent to 113.7 billion yuan, largely due to sales of the Honor brand and server business, but details were not disclosed.
Revenue from all three key sectors of the company declined.
Consumer electronics was once the most important sector of the company, whose revenue fell by almost 50% in 2021. Career business, which includes telecom and communications equipment, saw its revenue decline by 6.97%, while enterprise business (including servers and cloud services) declined by 2%.
It is believed that Huawei’s business was badly affected by the US actions against the company.
In May 2019, former US President Donald Trump blacklisted Huawei, making access to US technology impossible. The United States has barred Huawei from purchasing key components, such as microchips, and as a result, the Chinese company has lost access to Google services, forcing it to develop its own operating system.
Huawei is seeking to step into new areas, including enterprise computing, wearables, health technology, smart car technology, and software, following the impact of the US sanctions on the smartphone business.
Huawei is the world’s largest telecom network gear supplier and recently became the world’s second-largest smartphone company and at one point even became the number one company. But as a result of US sanctions, it has now slipped below the top 10 smartphone companies.
In October, Huawei reported a 32% drop in sales of its phones between January and September 2021.