Huawei misses revenue target as US ban and coronavirus weigh
Huawei has missed its revenue target for the full year as the impact of a US trade ban was compounded by the coronavirus outbreak.
The Chinese tech giant posted revenue of 858.8bn yuan (£98bn) in 2019. This marked an increase of more than 19 per cent, but fell short of its target of $135bn (£109bn).
Net profit for the year rose 5.6 per cent to 62.7bn yuan — a slowdown on the 25 per cent growth posted in 2018. Cash flow increased 22 per cent at 91.4bn.
Huawei rotating chairman Eric Xu said it had been a “very challenging year” for the company, which has been added to a US trade blacklist over national security fears.
By contrast, the UK government has given the controversial telecoms firm the green light to build non-core parts of the country’s 5G network, though it has imposed a 35 per cent market share cap on the company.
Huawei said its production facilities in China had generally been restored after they were shut down due to coronavirus, adding that it did not forecast any impact in the short term.
However, the firm warned of a long-term impact on its supply chain if the spread of the pandemic outside China could not be contained.
“It will cause long-term challenges and uncertainty over whether Huawei can continue to supply the market,” Xu told reporters.
Huawei’s revenue outside China slipped 1.6 per cent over the year amid growing pressure from the US. Australia, Denmark and Norway were among the countries to cut their ties with the firm amid fears its technology could be used for spying by authorities in Beijing.
Huawei has always denied allegations of wrongdoing and has accused US President Donald Trump of launching a politically motivated attack.
Xu today said he believed it was likely that Beijing would take counter-measures against US companies operating in China.
“The Chinese government will not stand by watching Huawei be slaughtered on the chopping board,” he said.
Aside from the impact of the 5G crackdown, Huawei reported 34 per cent growth in its consumer business to 467.3bn yuan.
The firm shipped a total of 240m smartphones over the year, compared to 206m in 2018.
The US ban means Huawei phones will no longer have access to Google’s Android services, and the Chinese firm has since developed its own operating system.
However, Huawei today said it will seek to secure a partnership to offer Google-made apps through its own app store.
Huawei warned that 2020 will be an even more difficult year for the company amid a strain on its supply chain from both the US blacklisting and the coronavirus outbreak.