Low Device Demand, Huawei’s Profits Drop Drastically!

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Shenzhen, Gizmology – A black cloud seems to be enveloping Huawei. Yes, this Chinese technology company reported that it experienced a sharp decline in profits.

As quoted Gizmologist from Reuters, Saturday (13/8/2022), Huawei said its net profit in the first half of this year decreased by 52%. The year-on-year revenue in this period fell 5.9% compared to last year in the same period.

If the accumulated revenue pocketed by Huawei in the January-March period this year is only 301.6 billion yuan. According to Huawei, this decline was caused by weaker demand.

However, according to Ken Hu, a representative of the company’s business unit, Huawei’s declining profits were only experienced in the mobile device division. Meanwhile, the network is fairly stable.

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“Our device business is really affected, but the growth in ICT infrastructure is still stable,” he said.

Huawei’s Profits Are Getting Narrow

Based on calculations Reuters, Huawei’s profit margin is currently narrowing to 5% with a net profit of 15.08 billion yuan. This figure is claimed to be a decrease from revenue in the first half of 2021 which reached 31.39 billion yuan.

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Meanwhile, Huawei claims that the decline in profits is due to the current economic crisis. In addition, the COVID-19 pandemic has disrupted supply chains to the detriment of business devices such as mobile phones and laptops.

Although revenue from its device business fell by more than a quarter over the same period last year, to 101.3 billion yuan, Huawei claims that its infrastructure and enterprise business divisions have seen an increase.

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This increase is due to the fact that it provides a greater portion of investment in the latest technology and business. This step is considered to have had an impact on the profits obtained.


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