Huawei reports small increase in 2020 sales, profits despite U.S. sanctions

Huawei reports it was up 3.8% year-over-year in 2020 with China accounting for 65% of revenues

Chinese vendor Huawei reported its sales revenues reached CNY 891.4 billion (USD 136.7 billion) in 2020, up 3.8% year-on-year while its net profit rose 3.2% to CNY 64.6 billion, the company said in its annual report.

The company said that trade restrictions implemented by the U.S. government had impacted the company’s operations outside China.

In 2019, Huawei had recorded a 5.6% increase in profit and 19.1% rise in revenue.

The company’s revenue in China grew 15% to CNY584.9 billion, but fell in all other regions, down 12.2% to CNY180.8 billion in EMEA; 8.7% to CNY64.4 billion in Asia Pacific; and 24.5% nt in the Americas to CNY39.6 billion.

China accounted for 65% of Huawei’s overall revenues last year, up compared to 59% the previous year.

The company’s carrier business recorded revenues of CNY302.6 billion, almost flat year-on-year, while the company’s enterprise business saw its revenues expand by 23% to CNY100.3 billion.

Huawei’s consumer business recorded revenues of CNY482.9 billion, up 3.3% year-on-year.

R&D investment stood at $21.8 billion in 2020, representing 15.9% of overall revenue, and 3,000 staff were added during the year taking its global total to 197,000.

“Over the past year we’ve held strong in the face of adversity,” said Ken Hu, Huawei’s rotating chairman. “We’ve kept innovating to create value for our customers, to help fight the pandemic, and to support both economic recovery and social progress around the world. We also took this opportunity to further enhance our operations, leading to a performance that was largely in line with forecast.”

In May 2019, the U.S. Department of Commerce added Huawei to its Entity List, a decision that effectively banned the company from buying parts and components from U.S. companies without U.S. government approval.

Under the order, Huawei needs a U.S. government license to buy components from U.S. suppliers. At that time, firms including Google, Intel, Qualcomm and Microm had halted shipments due to the restrictions. Huawei relies heavily on computer chips imported from U.S. companies.

The U.S. government included Huawei in the Department of Commerce’s Entity List due to security concerns, as Washington believes that the Chinese government uses Huawei’s equipment for spying purposes.

Huawei’s founder and CEO, Ren Zhengfei, previously said that the company believed that it will be extremely unlikely that the new U.S. administration would lift the current restrictions imposed by former President Donald Trump

“I think it’s very unlikely that the U.S. will remove us from the Entity List. I won’t say it’s impossible, but it’s extremely unlikely. We basically aren’t considering it a possibility,” Ren said,

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