Monday, April 19

Huawei: record profit, but Trump’s policy has broken growth in sales around the world


Updated

“Life has not been easy,” admits Ken Hu, president of the Chinese firm. Profit is 8,390 million euros (+ 3.2%) and revenues of 115,900 million (+ 3.8%). However, this business growth has been clearly suffered by the US campaign.

Meng Wanzhou, Huawei's CFO, in a Vancouver court.
Meng Wanzhou, Huawei’s CFO, in a Vancouver court.AP

Huawei, the world leader in telecommunications equipment, has announced a record profit in 2020, despite the veto imposed by the Donald Trump Administration, which has succeeded in preventing a normal development of the Chinese giant’s commercial activities, as is the case. as seen in the billing of the company.

This firm improved its net profit by 3.2% to reach a figure of 64.600 million yuan (approximately 8,390 million euros). The volume of business also continues to rise, but these revenues are already growing tenuously, 3.8%, which contrasts with the positive rate of 19.1% registered a year earlier. Thus, the invoicing annual company is 891.4 billion yuan (115.9 billion of euros).

In the results concerning 2020, released this Wednesday, Huawei has omitted the number of phones sold, a detail that a year earlier was disclosed. In the sector, it is estimated that the Chinese have dispatched 20% fewer telephones in 2020 than in 2019, as different consultants have collected.

“Firm in the face of adversity”

“During the last year, we have stood firm in the face of adversity,” said Ken Hu, president of the company: “Life has not been easy for us.” The leader thus refers to the accusation and smear campaign led by the US since 2018 and to which the new president Joe Biden has not put an end to the moment. The battery of accusations, espionage included, has been a brake on Huaweu’s income growth, which was previously soaring, with increases of around 30% in year-on-year comparisons.

The US authorities began to draw attention in 2018 to possible leaks of Huawei to the Chinese government, a criticism that gained momentum in May 2019 under Trump’s mandate, when the company was included. in a blacklist. The Chinese company has repeatedly insisted that it is a private company and it is recalled that none of these accusations is accompanied by any evidence.

This US policy has come to harm companies in that country that used to maintain normal commercial relations with Huawei and that had to distance themselves. For example, Huawei phones have been deprived of the application store of the Californian Google, Google Play, and the Chinese brand phones have released an operating system (HarmonyOS) that serves as an alternative to Android, also developed by Google . This Wednesday, Ken Hu explained that they have had to change their supply chain and focus on a diversification of the business, for example approaching the booming field of the cloud computing (cloud computing). The Shenzen firm is present in 70 countries and has around 197,000 employees.

The heir, in court

In addition, the company’s chief financial officer, Meng Wanzhou, considered heir to the empire raised by her father, Ren Zhengfei, is pending extradition from Canada, where she was detained, to the US, where she is accused of omitting information about Huawei’s business in Iran, which would have contravened the sanctions policy established by Washington. This same week, the board has gone back to the Vancouver court.

All these circumstances have contributed to a withdrawal of Huawei in China, where its sales continue to grow, while its business has been reduced in the western markets of Europe and North America.

Data from some consulting firms in the sector, such as IDC, yield resounding conclusions: from being the second global brand in units sold in 2019 (only surpassed by Samsung), Huawei has moved to the third position (exceeded in 2020 by Apple). IDC estimated that Huawei’s decline in smartphones sold was -21% in 2020, with a special incidence in the last quarter (-42%). Another consultancy, Canalys, calculates similar data: a drop of -22% annually in 2020.

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