Huawei’s net profit up 33 percent year-over-year as growing IT division and smartphone sales reap rewards
Huawei’s has revealed that its annual revenues have grown 37 percent year-on-year, with the company’s three different business groups achieving an annual revenue of $60.8 billion (£43bn) during 2015.
Net profit for the Shenzen-based giant stood at $5.7 billion (£4bn), with sales strong in both the company’s ICT Enterprise business group and its consumer devices group, which sells Huawei’s smartphones.
An increase in the company’s R&D spending, however, damaged Huawei’s operating margins, which fell to 11.6 percent from 11.9 percent. Huawei is renowned for its healthy R&D spend, but reported that its 2015 budget went over an originally proposed 10 percent revenue re-investment.
Guo Ping, Huawei’s deputy chairman and rotating CEO, pinned a large part of Huawei’s success on the ICT market.
“In part, Huawei owes its long-term growth to the sheer size of the ICT market, which is the driving force of digital economies around the world. However, our growth is also a direct result of strategic focus and heavy investment in our core businesses,” he said.
Huawei’s carrier business group, which sells network equipment, made $35.8 billion (£25bn) in annual revenue, up 21 percent year over year. The widespread rollout of 4G networks accounted for a large portion of this growth, Huawei said.
Deals like its cloud partnership with Deutsche Telekom will help Huawei continue its IT and carrier growth in the near future.
The company’s enterprise group, which has started to focus on the rollout of IoT and connected cities, as well as verticals such as energy and transport, reported $4.3 billion (£3bn) in annual revenue.
“Over the next three to five years, we will concentrate on enhancing connectivity, enabling the development of vertical industries, and redefining network capabilities,” said Ping.
Huawei’s consumer group made revenues of $19.9 billion (£14bn), up 73 percent year over year. The company said the increase was a result of heightened demand for its medium to high-end smartphones, as well as increased brand recognition in Europe.