Revenues fall but Huawei gains profitability in 2021
Despite a number of significant savings ban its technology from their communication infrastructuresChinese tech giant Huawei maintained strong operations throughout fiscal 2021, with a significant increase in profits despite a nearly 29% drop in revenue.
According to Huawei’s 2021 annual report, the company’s overall performance was in line with expectations. Its carrier business was described as remaining stable, its enterprise business grew steadily, and its consumer business rapidly expanded into new areas.
In addition, the company has embarked on a fast track of ecosystem development. According to the company’s chief financial operator, Meng Wanzhou, despite declining revenues in 2021, Huawei’s ability to make profits and generate cash flow was increasing and the company was now better able to cope with uncertainty.
In total, Huawei generated 636.8 billion yuan ($99.9 billion) in revenue in 2021 and 113.7 billion yuan ($17.8 billion) in net profit, an increase of 75.9 % year over year. The company’s R&D expenditure reached CNY 142.7 billion ($22.4 billion) in 2021, accounting for 22.4% of its total revenue, and bringing its total R&D expenditure to over the past 10 years to more than CNY 845 billion ($132.5 billion).
In the future, the company also plans to continuously increase its R&D investment. Thanks to the improved profitability of its core businesses, its cash flow from operating activities increased significantly in 2021, amounting to 59.7 billion yuan ($9.4 billion), while its liabilities ratio fell to 57.8%. The result, the company said, was that its overall financial structure had become more resilient and flexible.
By helping carriers around the world roll out 5G networks in 2021, Huawei’s carrier business generated 281.5 billion yuan ($44.2 billion) in revenue. The company said third-party test results revealed that 5G networks built by Huawei for customers in 13 countries, including Switzerland, Germany, Finland, the Netherlands, South Korea and Arabia Saudi Arabia, provide the best user experience.
He added that by working with operators and partners, he had signed more than 3,000 commercial contracts for industrial 5G applications. These types of 5G applications were seeing large-scale commercial use in sectors including manufacturing, mining, steelworks, ports and hospitals, he said.
Huawei said its business business benefited from continued digital transformation trends, growing rapidly and generating 102.4 billion yuan ($16.1 billion) in revenue in 2021. During the year past, Huawei launched 11 scenario-based solutions for key industries such as government, transportation, finance. , energy and manufacturing.
The company has also set up several dedicated teams, including a coal mine team, a smart road team, and a customs and port team, to combine resources to meet the needs of its customers more efficiently.
The annual report also noted that more than 700 cities and 267 Fortune Global 500 companies have chosen Huawei as their digital transformation partner, and the company now works with more than 6,000 service and operations partners globally.
Over the past year, Huawei has also focused on developing its openEuler, MindSpore and HarmonyOS ecosystems based on the principles of open collaboration and shared growth. More than eight million developers are currently using Huawei’s open platforms, open source software and development tools to explore new scenarios and business models.
Going forward, Huawei said it will advance its journey of digitization, intelligent transformation and low carbon. “Building on talent, scientific research and a spirit of innovation, we will continuously increase investments to reshape our paradigms for fundamental theories, architecture and software, and strengthen our long-term competitiveness,” said Huawei rotating chairman Guo Ping.