SHENZHEN: Chinese telecom giant Huawei said Wednesday (Mar 31) it achieved a record profit last year, but revenue growth slowed sharply amid the pandemic and tightening US pressure that has pushed the company into new business lines to survive.
Unlisted Huawei said net profit rose 3.2 per cent to 64.6 billion yuan (US$9.9 billion) in 2020, while revenue inched 3.8 per cent higher to 891.4 billion yuan.
The world's leading supplier of telecom networking gear and a top smartphone brand, Huawei's future has clouded over since the former Trump administration in 2018 launched a campaign to contain the company which has gradually eaten into its bottom lines.
Bloomberg News reported that Huawei's revenue in the fourth quarter of 2020 shrank for the first time on record. Huawei representatives could not immediately confirm that.
Before the US pressure began, revenue growth was routinely in the neighbourhood of 30 per cent or more, though it slowed to around 19 per cent in 2019.
"Over the past year we've held strong in the face of adversity," chairman Ken Hu said in a statement.
During a briefing at Huawei headquarters in the southern city of Shenzhen, Hu blamed the pandemic and the "unfair" US measures for the slower 2020 growth.
Smartphone sales have plateaued after the US cut Huawei off from key components and banned it from using Google's Android operating systems in its handsets.
Huawei said its consumer products division - which makes smartphones and other personal devices and accounts for more than 50 per cent of overall revenue - managed 3.3 per cent sales growth in 2020.
But that masks an accelerating impact from the US sanctions. Data from independent analysts has shown that both domestic and overseas phone shipments plunged more than 40 per cent in the fourth quarter of 2020.
In addition, a number of US allies have responded to Washington's warnings of a Huawei security threat by banning the use of its networking equipment in national telecom systems. Revenue growth in Huawei's carrier network division was flat last year at just 0.2 per cent.
The United States, locked in a worsening rivalry with China, fears that Beijing's Communist Party government could utilise Huawei systems installed globally for espionage. China's government and Huawei have heatedly denied the suggestion.
Any hopes of a reset under the new administration of President Joe Biden were dashed two weeks ago when US regulators included Huawei on a list of Chinese telecom companies deemed to pose a national security risk.
On top of all that, chief financial officer Meng Wanzhou - daughter of CEO and founder Ren Zhengfei - is in Canada fighting extradition to the US on charges that she and Huawei violated US sanctions against Iran.
Analysts have said that while Huawei is likely to survive, it will need to make major changes to its business.
The company has pressed ahead with that, fast diversifying to encompass enterprise and cloud computing, internet-of-things devices and networks, and other business segments related to the advent of 5G networks, an area of Huawei strength, while also doubling down on the huge China market.
It sold off its Honor budget phone line to a domestic consortium late last year and - exiled from Android - is pushing to build up the ecosystem surrounding its remaining Huawei-brand smartphone line.
Hu said Huawei's transformation would continue.