Huawei Technologies has reported a 28.56% dip in its revenue last year, which saw a sharp decline in its smartphone business. Embattled amidst ongoing US trade sanctions, the Chinese technology vendor is “readjusting” its business portfolio to tap digitalisation and carbon neutrality opportunities.
Its 2021 revenue came in at 636.8 billion yuan ($100.01 billion), down from 891.4 billion yuan in 2020. Its net profits, however, climbed 75.9% to 113.7 billion ($17.86 billion), Huawei said Monday. Cash flow from operating activities grew to 59.7 billion yuan ($9.38 billion).
At a media briefing, rotating chairman Guo Ping said its carrier business was “stable” while the enterprise business was seeing “steady growth”. Its consumer business had moved into “new domains”, he said.
Huawei CFO Meng Wanzhou, speaking in an official event for the first time since her return from Canada, said at the briefing that the company was “more capable of dealing with uncertainty” on the back of growing profits and cash flows, despite a drop in its 2021 revenue.
The announcement confirmed forecast warnings Guo alluded to last December in his new year message to employees. He had pointed to an unpredictable business environment, “politicisation of technology”, and growing deglobalisation as “serious challenges” the company faced.
In an email interview with ZDNet, Huawei executives pointed to “a big decline” in its smartphone business as the key factor behind the drop in overall revenue.
Huawei’s president of device business Richard Yu said US sanctions would not stop the Chinese vendor from seeking innovation. Noting that these challenging times eventually would pass, Yu said Huawei would continue to drive customer experience around five key areas including smart home, smart mobility, and entertainment.
The company in the past year had looked to diversify its product portfolio, as part of efforts to buffer dwindling smartphone sales amidst ongoing US trade bans. Last June, it released an update of its mobile operating system, HarmonyOS 2, across 100 of its devices in China, including smartphones, smart watches, and tablets. Huawei previously tapped Android as the OS for its smartphones, but was forced to look for alternative platforms when US trade sanctions meant Google had to pull back Huawei’s access to its mobile apps and platform.
Pulling aside the drop in smartphone sales, Huawei told ZDNet its “+8” device business–comprising connected products–clocked a sales growth of more than 30% last year. This unit encompassed devices such as wearables and smart screens.
The company spokesperson added that it also continued to introduce smartphones last year, including its fourth foldable offering Huawei P50 Pocket.
According to Huawei, sales outside of China dropped across the board. It noted that overseas sales accounted for more than half of its carrier business revenue last year.
Its increase in net profits was fuelled by the sale of its Honor and server businesses, though, Huawei told ZDNet profits were in part driven by “improved product portfolios” and greater efficiencies from its operations.
The vendor reportedly sold its x86 server business, also due to the US trade sanctions, to Henan Information Industry Investment last November.