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Huawei on Friday reported a nearly 70% decline in profit last year amid sanctions and pandemic challenges, but its enterprise sales rose as the Chinese technology giant sought to pivot into digital industries and reduce its vulnerabilities to US sanctions. Image Credit: AP

Beijing: China’s Huawei Technologies said net profit slumped last year, as the tech conglomerate boosted research and development spending and grappled with increases in materials costs.

But revenue climbed 0.9 per cent, in line with a company prediction.

It posted net profit of 35.6 billion yuan ($5.2 billion), down roughly two-thirds from 2021 when profit was helped by the sale of its Honor mid-range smartphone business. The decline was, however, still severe even when compared to 2020 - a drop of 44 per cent.

“In 2022, a challenging external environment and non-market factors continued to take a toll on Huawei’s operations”, Eric Xu, Huawei’s rotating chairman, said in a statement.

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“In 2023 and the coming years, sustainable survival and development will remain a strategic focus for Huawei. Plum blossoms tend to grow sweeter from a harsh winter’s freeze.

Today, Huawei is like a plum blossom,” he said.

Revenue for 2022 came in at 642.3 billion yuan. While that represented mild growth over 2021, it was still far below the record 891.3 billion yuan logged in 2019 when it was the top Android smartphone vendor globally.

By segment, revenue from the company’s enterprise division, which includes business to-business industrial projects, soared 30 per cent. Revenue for its telecommunications business inched up 0.9 per cent while sales for its consumer electronic business tumbled 11.9 per cent.

R&D spending rose 13.2 per cent to 161.5 billion yuan, equivalent to a quarter of the company’s revenue, said Meng.

Huawei’s asset-to-liability ratio was 58.9 per cent and it had a net cash balance of 176.3 billion yuan.

“Our financial position remains solid, with strong resilience and flexibility,” said Meng, who will become the company’s chairwoman on April 1. Huawei rotates its chairperson every six months.