Huawei has released its annual report and financial information for 2020, demonstrating the effect US sanctions had on its company last year. The report shows that while sales from North America and Europe have fallen significantly, stronger performance in China has enabled the company to achieve higher sales and net profit than a year ago.
Huawei does not report traditional quarterly earnings as it is a private company with an unusual employee ownership structure. The annual reports are often the best look at how it actually performs.
The company’s revenue for 2020 was 891.4 billion yuan (~ $ 136 billion), an increase of 3.8 percent from 2019. Net profit increased 3.2 percent to 64.6 billion yuan (~ 9 billion). $ 86 billion). 66 percent of Huawei’s sales were in China last year, up from 59 percent the previous year; sales from America meanwhile decreased by 24.5 percent.
Huawei notes that its carrier business in China has grown due to a rapid local 5G rollout, which relies heavily on Huawei’s technology – competitor Nokia stands out for its absence from the market. According to the company, the rollout of 5G networks has also been strong in Europe, the Middle East and Africa. But in the Americas, the sharp drop in sales was attributed to “investment fluctuations in some countries’ telecom markets.” Countries like Canada, for example, chose Samsung over Huawei for their 5G rollout.
An unnamed Huawei manager told The Washington Post and other publications this week that 2020 was “a very difficult year” for the company. The export restrictions imposed by the US would have “had a tremendous impact on Huawei, especially Huawei’s consumer business.”
According to Huawei, the sales of the consumer division even grew by 3.3 percent in 2020. However, it is clear that the company’s smartphone sales, in particular, are falling even in China, largely due to a lack of manufacturing capabilities as Huawei relies on components it has stocked. before the sanctions took effect. And like Bloomberg notesIn the last quarter of 2020, Huawei’s quarterly profit fell for the first time year after year.
“In the long run, we believe this damages the reputation and also the competitive advantage of the US industry,” said the executive, adding that Huawei sees no sign yet that the Biden administration could ease the restrictions that were put in place. under former President Trump.