The Chinese telecom giant Huawei has reported a lacklustre growth of 0.9% in annual revenue from 63.68 billion RMB (9.27 billion USD in 2021) to 64.23 billion RMB, or 9.35 billion USD, in 2022. However, its net profit plummeted by 69% year on year to 35.6 billion RMB (5.18 billion USD) in 2022, according to its financial report released on 31 March.
While stating “the decline in the consumer business abated”, the downward trend in the sector’s revenue generation continued as US sanctions on Huawei continues into its fourth year, down 11.9% yearly to 21.45 billion RMB (3.12 billion USD). However, such decline has been significantly narrowed from the 49.6% in 2021.
Speaking at the company’s annual report press conference, Eric Xu, Huawei’s Rotating Chairman said, “a challenging external environment and non-market factors continue to take a toll on Huawei’s operations.” He also described the overall business results as “in line with forecast”.
“Due to the pandemic and restrictions we faced, the revenue from our consumer business continued to decline,” said the statement. It also attributed the occurrence to a “heavy investment” in the company’s research and development. A total of 161.5 billion RMB (23.51 billion USD) was invested into R&D, as per Sabrina Meng, CFO at Huawei, which represented 25.1% of the company’s total revenue.
Huawei was effectively banned from US communication networks since 2019, when the company and 70 other affiliates were added to the Entity List, a trade blacklist that bars listed bodies from purchasing components from US companies, over national security concerns.
Such sanctions have continued with the US government’s intention to ban on sales of parts to Huawei this January serving as the latest crackdown on China’s tech firms by the current Biden administration.
In light of the continued restrictions, Ren Zhengfei, founder of Huawei revealed in a speech at Shanghai Jiaotong University on 17 March, that the brand had replaced more than 13,000 parts adopted in Huawei’s products that had been barred by the US and had redesigned 4,000 circuit boards for its products.
Meanwhile, the endeavour has been beefed up in sections such as cloud computing and digital power businesses, which generated a total revenue of 96.1 billion RMB (13.99 billion USD; 45.3 billion RMB and 50.8 billion RMB respectively), accounting for 15% of the company’s total revenue in 2022.
The tech giant also shows its determination in continuing to weather the storm with these combined efforts expected to “generate a steady stream of revenue and sustain its survival while also laying the groundwork for future development.”