Huawei technologies reported its first quarterly sales rise since late 2020 as the Chinese telecom equipment giant battles a US blacklist that has hurt its smartphone business.

Revenue rose 1% to C¥170.6 billion (R410 billion) in the three months ended June, according to estimates based on the company’s first-half revenue of C¥301.6 billion. This is the company’s first sales growth since the last quarter of 2020, when US sanctions severely limited Huawei’s global business.

“Although our devices business was hit hard, our ICT infrastructure business maintained steady growth,” Huawei Chairman Ken Hu said in a statement. “Moving forward, we will use the trends in digitalization and decarbonization to continue to create value for our customers and partners and ensure the development of quality.”

Quarterly net income fell 35% to C¥9.48 billion, based on Huawei’s disclosure of a net profit margin of 5% for the six months. According to a representative of the company, the net income decreased mainly due to high initial costs for finding new areas of business and developing new technologies.

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A series of Donald Trump-era bans have cut off Huawei from its US partners and other key chip suppliers such as Taiwan’s TSMC, knocking it out of the running for the world’s biggest smartphone maker. Sales of telecommunications equipment, including the latest wireless base stations, totaled C¥142.7 billion — about half of the company’s revenue — in the first six months of the year. The Chinese firm is also exploring the electric vehicle, solar farm and smart city sectors.

The US is tightening restrictions on China’s access to advanced semiconductor technology, including chip-making machinery from Dutch supplier ASML. Such moves signal further obstacles for Huawei in its pursuit of cutting-edge technology. — (c) 2022 Bloomberg LP

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