Huawei's Full Year Profits Jump by a Third
Published on: 31st Mar 2014
By: Ian Mansfield
China's Huawei has posted a one third jump in its full year profits as the company benefits from strong demand in its domestic market.
The company posted a 34% increase in profits to RMB21 billion (US$3.47 billion), on revenues which rose more modestly by 8.5 percent to RMB 239 billion (USD39.5 billion).
The company said that profits rose faster than sales thanks to cost cutting measures which saw gross margin improve by 1.2 percent to 41 percent.
Sales from the Chinese market totaled RMB84 billion, an increase of 14.2% year-on-year. The carrier network business continued to maintain modest growth, while the enterprise and consumer businesses both achieved rapid growth, increasing by over 35%.
Sales in EMEA rose by 9.4% to RMB84.7 billion, and sales in Asia Pacific were up by 4.2% to RMB39 billion.
Sales in the Americas fell by 1.3% to RMB31.4 billion, mainly due to declines in the USA offsetting gains in Latin America.
"Thanks to the favourable global macroeconomic and industry environment, as well as the effective execution of our company strategy, Huawei basically achieved our business targets for 2013," said Huawei current chief executive Eric Xu in a statement.
The company is targeting a further 10 percent rise in revenues this year again, and is aiming for global sales of USD70 billion by 2018.
One nugget that came out of the exceptionally rambling opening letter from Ren Zhengfei, who talked about dragons and tortoises, was a hint that the company will be reforming its wage structure.
He said that the pay difference between employees needs to be widened to reflect the contribution made by higher performing staff. That may signify a break from the flatter pay structures favoured by Chinese firms as a legacy of the Communist government.