Huawei Admits 2021 Revenues Down Nearly 30 Percent

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Chinese networking giant reveals scale of challenge posed by ongoing US and Western restrictions to its business performance

China’s Huawei Technologies continues to feel the impact of the US blacklisting of its operations, with ongoing financial pain.

In a New Year letter to staff on Friday, rotating chairman Guo Ping said the firm expects 2021 revenue to have declined by nearly 30 percent.

Even worse, Ping predicted continued challenges in the New Year, meaning there will be no relief for the Chinese giant during 2022.

Financial impact

According to Reuters, Ping said revenue for the year 2021 is expected to be 634 billion yuan ($99.48 billion).

That represents a fall of 28.9 percent from 2020 revenues of 891.4 billion yuan ($140bn).

Guo reportedly said next year “will come with its fair share of challenges” but that he was satisfied with Huawei’s 2021 business performance.

“An unpredictable business environment, the politicisation of technology, and a growing deglobalisation movement all present serious challenges,” the letter states.

“We need to stick to our strategy and respond rationally to external forces that are beyond our control,” Guo reportedly said.

Huawei will continue focusing on information and communications technology (ICT) infrastructure and smart devices, the letter said.

Meanwhile Huawei’s latest earnings revealed that third-quarter revenue fell 38 percent compared with a year earlier.

The first three quarters’ revenue was down by almost a third year-on-year.

US sanctions

The US under President Donald Trump had placed Huawei on the “entity list” national security blacklist in 2019, accusing it of acting against US interests.

The blacklist requires American companies to request approval for technology sales to Huawei, under the assumption that most will be denied.

In late 2020, then rotating chairman Eric Xu had said Huawei’s target for 2021 was “to survive”, and told reporters his “biggest hope” is that the company will still exist in five to ten years.

Under President Joe Biden the US has maintained the blacklisting.

And in August this year, the US said it had “not eased” policies put into place by the previous administration against Huawei.

That same month Huawei reported its largest-ever drop in revenues in the first half of 2021, in part due to the sale of its Honor smartphone brand. The company said it had 320.4 billion yuan (£36bn) in revenues for the period, a decline of almost 30 percent compared to the same period in 2020.

Huawei had sold its Honor smartphone brand in November 2020, following the imposition of US sanctions, in order to allow the unit to continue in business as an independent company.

In September 2021, Huawei said US sanctions are causing the company at least $30 billion (£22bn) in annual smartphone handset revenue losses, but it was resigned to the situation.

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Author: Tom Jowitt
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