Chinese company Huawei Technologies saw its net profit drop by more than two-thirds to 35.6 billion yuan (112 billion kronor) last year. According to calculations by CNBC television, this is the deepest year-on-year drop since 2011. The technology conglomerate has increased spending on research and development and has also struggled with a rise in material costs. The company’s revenue increased marginally, according to its earnings report.
Far from the top
The firm posted a net profit of 113.7 billion yuan the year before. The results at the time were helped by the sale of Honor’s low-cost phone division in the hope that it would be able to boost sales when it separated from its parent firm hit by US sanctions.
The firm’s revenue rose 0.9 percent to 642.3 billion yuan last year. That is significantly less than the record 891.3 billion yuan recorded in 2019, when Huawei was the world’s top seller of Android smartphones, Reuters reported.
National security risk
The US government has repeatedly said Huawei poses a national security risk. This is an accusation the Chinese company has consistently denied. The tensions between Huawei and the US government have manifested themselves, among other things, in the fact that the US authorities had Huawei’s CFO Meng Wanzhou detained in Canada in December 2018, for whom a New York court issued an arrest warrant.