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Huawei Technologies reported a 76% surge in net profit, in 2021, despite a fall in revenue, as the company weathers the brunt of American sanctions.
In a statement, Huawei’s chief financial officer, Meng Wanzhou, said, “Despite a revenue decline in 2021, our ability to make a profit and generate cash flows is increasing, and we are more capable of dealing with uncertainty.”
The company’s increased profits amid declining revenues reflect efforts to shave costs and increase reliance on domestic components after being put on the Entity List by the Trump-administration.
The Entity List is a U.S. blacklist that restricts American firms from exporting key components and software to any company listed on it.
Huawei reported a 28.5% year-on-year decline in its revenue which came down to 636.8 billion Chinese yuan ($99.9 billion) in 2021. Net profit rose 75.9% year-on-year to 113.7 billion yuan ($17.84 billion).
Meng attributed U.S. sanctions, “supply continuity challenges,” and slowing 5G demand in China as the key reasons behind the revenue fall.
(With inputs from CNBC)
Picture credits: CNBC