Huawei profit in 2018 rises 25% amid US stifling its 5G push

Beijing: Huawei Technologies Co. posted a 25% jump in annual profit even as the Chinese telecommunications giant faces as US-led push to keep it out of 5G networks.

China’s largest tech company by sales posted net income of 59.3 billion yuan ($8.8 billion) in 2018 as it won customers for its smartphones and networking gear, according to a statement on Friday. Revenue for the year jumped almost 20% to 721 billion yuan.

Despite being at the centre of global scrutiny, Huawei is winning customers for its equipment as it contends with Apple Inc. for the mantle of world’s No. 2 smartphone label. The company has already disclosed accelerated growth in the first two months of 2019 as it develops cutting-edge chips and expands into cloud services. But its global prospects have been clouded by the Trump administration, which is waging a campaign to block the Shenzhen-based company from supplying equipment for the fifth-generation mobile networks.

“In 2019, we are cautiously optimistic about the growth in 5G business,” Guo Ping, one of the company’s three rotating chairmen, said in an interview with Bloomberg Television. “The future of telecom industry lies in the opportunities that 5G and future generations of technologies can provide to other industries.”

Revenue from its consumer business, which includes smartphones, jumped 45% to 348.9 billion yuan while sales in the carrier unit were little changed at 294 billion yuan. Huawei said it invested more than 101 billion yuan, or about 14% of sales, in research and development.

After years of tension and accusations that the company makes it possible for Beijing to spy on the West, pressure on the Huawei has ratcheted up. Canada detained chief financial officer Meng Wanzhou last December at the behest of the US.

Meng, also Huawei-founder Ren Zhengfei’s eldest daughter, faces potential extradition on alleged bank fraud linked to US sanctions against Iran.

And the Chinese company is grappling with criminal charges for intellectual property theft. Both Meng and Huawei have denied wrongdoing.

bloomberg