Huawei’s sharp drop in sales, caused mainly by the strong restrictions imposed by the US Administration, is slowing down thanks to the good performance of its cloud business in China, which is offsetting the sharp drop in its sales of smartphones.
The Chinese technology giant reported this Friday that between January and June of this year it had obtained a turnover of 301,600 million yuan (43,357 million euros), 5.9% less than in the same period of the previous year. However, sales in its enterprise segment, which includes cloud computing, grew 27.5% to 54.7 billion yuan (7.863 million euros). Thus, the drop in its global turnover improved significantly compared to the first half of 2021, when its revenue fell by 29%.
Its consumer business (which includes smartphones) billed 101.3 billion yuan (14.563 million euros) between January and June of this year, 25.3% less than in the same period in 2021 and 60% less than in the first half of 2020, hit by weak demand for consumer electronics products. For its part, the operator business reported revenues of 142.7 billion yuan (20.514 million euros), 4.2% more than a year ago.
Huawei explained that its net profit margin in the first six months of 2022 stood at 5%, far from 9.8% in the first half of 2021. According to Reuters, its net profit was 15.08 billion yuan, below from the 31,390 million of the previous year.
“While our device business was hit hard, our ICT infrastructure business maintained steady growth,” said Huawei Rotating President Ken Hu, adding that “going forward, we will take advantage of trends in digitization and decarbonization to continue creating value. for our customers and partners, and ensure quality development.”
Huawei is building new lines of business, including components for smart cars and energy-efficient systems, and its cloud business, which is growing 18% in the Chinese market, according to consultancy Canalys.
The Financial Timess reported that Huawei, that was forced to sell its Honor smartphone brand in 2020 after the US boycott prevents you from accessing critical technology to make your phoneshas successfully outbid rivals Alibaba and Tencent in cloud contracts with Chinese companies.
According to Europa Press calculations, in the second quarter of 2022, Huawei would have invoiced 170.6 billion yuan (24.525 million euros), 1.4% more than in the same period of 2021. Mobile sales in China during this period fell by 14.2%, while volumes hit a decade low, according to Counterpoint Research.