Huawei’s net profit jumped 76% to $17.8 billion in 2021 despite revenue declines across its business as the company maintained solid operations throughout the past year.
However, the company’s revenue was flat at $99.9 billion in 2021.
“Despite a revenue decline in 2021, our ability to make a profit and generate cash flows is increasing, and we are more capable of dealing with uncertainty,” Meng Wanzhou, Huawei’s CFO, said.
“Thanks to the enhanced profitability of its major businesses, the company’s cash flow from operating activities dramatically increased in 2021, amounting to CNY59.7 billion. Its liability ratio also dropped to 57.8%, and its overall financial structure has become more resilient and flexible.”
The Chinese networking and smartphone giant informed investors that R&D expenditure represents 22.4% of its total revenue, bringing its total R&D expenditure over the past 10 years to over CNY845 billion. Moving forward, the company also plans to continuously increase investment in R&D.
“Overall, our performance was in line with forecast. Our carrier business remained stable, our enterprise business experienced steady growth, and our consumer business quickly expanded into new domains. In addition, we embarked on a fast track of ecosystem development,” Guo Ping, Huawei’s Rotating Chairman, stated at the press conference.
The company said its carrier business generated CNY281.5 billion in revenue and helped carriers around the world deploy leading 5G networks. Third-party test results have found that 5G networks were built by Huawei for customers in 13 countries. By working with carriers and partners, Huawei has signed more than 3,000 commercial contracts for industrial 5G applications.
Huawei’s enterprise business also grew rapidly, generating CNY102.4 billion in revenue during 2021. In the past year, Huawei launched 11 scenario-based solutions for key sectors such as government, transportation, finance, energy, and manufacturing. Over 700 cities and 267 Fortune Global 500 companies have chosen Huawei as their digital transformation partner and Huawei now works with more than 6,000 service and operation partners around the world.
Huawei’s consumer business zeroed in on consumer wants and needs, further building out the global ecosystem for a smart, all-connected era, as part of the company’s Seamless AI Life strategy for consumers around the world. This business generated CNY243.4 billion in revenue in 2021 and continued to see steady sales growth in smart wearables, smart screens, true wireless stereo (TWS) earbuds, and Huawei Mobile Services (HMS).
During the past year, Huawei also focused on building out its openEuler, MindSpore, and HarmonyOS ecosystems based on the principles of open collaboration and shared growth. Over eight million developers are currently using Huawei’s open platforms, open-source software, and development tools to explore new business scenarios and business models.
Guo stressed, “Moving forward, Huawei will advance its journey of digitalisation, intelligent transformation, and low carbon. Relying on talent, scientific research, and an innovative spirit, we will continuously increase investment to reshape our paradigms for fundamental theories, architecture, and software, and build our long-term competitiveness.”
