Chinese tech giant Huawei achieved a record profit last year despite pandemic headwinds and US blacklisting. However, those factors still took a toll on the pace of the company’s growth.
Huawei’s net profit was up 3.2% and reached 64.6 billion yuan ($9.9 billion), the company said as it presented its 2020 financial results on Wednesday. Meanwhile, its revenue rose by 3.8% year-on-year to hit 891.4 billion yuan ($136.7 billion).
The annual revenue growth was modest compared to the previous year when it amounted to 19%. Year-on-year net profit growth was also slower compared to 5.6% a year earlier, and the contrast is even more staggering compared to 2018, when it amounted to 25.1%.
“Over the past year we’ve held strong in the face of adversity,” Huawei’s rotating chairman, Ken Hu, said in a statement. “Because of the unfair sanctions placed on us by the US, our mobile phone business saw a revenue decline.”
While the company’s statement says that overall financial results were in line with its forecasts, Ken said the performance of the consumer business “fell short” of the company’s expectations due to a fall in smartphone revenue.
Last year’s growth was mainly driven by the company’s success at home, while Huawei’s business declined in its overseas markets. Sales in China jumped over 15% to total 584.9 billion yuan ($89.7 billion), accounting for over 65% of total revenue. Revenue in the Americas plunged by nearly a quarter, while it was down 12% in Europe, the Middle East and Africa, and 9% in Asia-Pacific. However, Huawei still feels “more optimistic” about next year’s performance beyond the domestic market.
Last year marked the first full year under the US sanctions for Huawei. Washington placed the company on its infamous Entity List in May 2019, essentially prohibiting American companies from doing business with the tech giant and making it difficult, or impossible, to export vital technologies to Huawei. Additionally, the US moved to block global chip supplies to Huawei and pressured its allies to ditch Huawei equipment, especially in the rollout of 5G networks.
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