Huawei's revenue in the first half of 2021 fell 29% year-on-year, but net profit margin still increased by 9.8%.
Huawei just had to report its worst revenue decline in decades. The US trade sanctions imposed on essential hardware and software components have dealt a heavy blow to the company's core smartphone business.

According to published data by the Shenzhen-based company, first-half revenue fell 29.4 percent year-on-year to 320 billion yuan ($49.5 billion).

Revenue from Huawei's consumer business group, which mainly focuses on smartphones, nearly halved to 135.7 billion yuan ($20.9 billion) in the first half, compared with 255.8 billion yuan. ($39.5 billion) in the same period last year, as the company's international market share declined due to lack of access to chip sources.

The network equipment business, which has been Huawei's mainstay for telecom network operators, fell to 136.9 billion yuan ($21.1 billion), a 14.2% plunge compared with a year earlier. The drop was attributed to project delays at China Mobile, the world's largest telecom operator, in which Huawei secured its large market share in 5G base station supply contracts.

Huawei, the world's largest telecommunications equipment maker and once China's largest smartphone supplier, did not report a first-half net profit, but showed that its interim net profit margin the company still grew to 9.8% from 9.2% last year.

"Our goal is to survive and do it in a sustainable way," said Huawei rotating president Eric Xu Zhijun. The group's business activities still have bright spots. The segment posted revenue of 42.9 billion yuan ($6.6 billion), up 18.2% from a year ago.

That result has prompted moves to diversify Huawei's operations. Earlier this week, the company announced plans to take the lead of the top cloud service providers in the Asia-Pacific region amid the smartphone and device businesses. The network is in trouble because of US trade sanctions.

"We are looking to be among the top three cloud service providers in Asia-Pacific in the next three years , " said Zeng Xingyun, president of Huawei Cloud region.

Huawei, which was placed on a US trade blacklist in 2019, forced the company to adjust because of US sanctions. The company has struggled with tighter restrictions imposed since last year, including access to processor chips developed or manufactured with US technology.

Last month, Huawei had to launch flagship smartphones P50 and P50 Pro, both of which do not support 5G connectivity.

"US sanctions over the past two years have limited the development of our 5G smartphones, " said Richard Yu Chengdong, executive director of Huawei's consumer business.

Therefore, the company is facing the dire prospect of continuing to lose connectivity in the global smartphone market. In Q2, Huawei dropped out of the top five smartphone vendors in China - the business's largest market - for the first time in more than seven years.
Axact

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