China's Huawei
Technologies 2014 profit grows 33 percent
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[March 31, 2015]
By Yimou Lee
HONG KONG (Reuters) - China's Huawei
Technologies Ltd reported a 33 percent rise in its 2014 net profit, as
the global adoption of fourth-generation (4G) mobile technology boosted
sales for the world's No.2 telecommunications equipment maker.
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Global revenue rose 21 percent from a year ago to 288.2 billion yuan
($46.51 billion) in 2014 for Huawei and is expected to jump another
20 percent this year, the Shenzhen-based company said.
Net profit rose to 27.9 billion yuan last year, in line with the
firm's own estimates, but operating margins fell to 11.9 percent
from 12.2 percent in 2013, the company said at an earnings briefing
on Tuesday.
In response to recent questions about its debt financing sources,
the firm said it got 78 percent from overseas financial institutions
and the rest from Chinese banks.
Total liabilities stood at 209.8 billion yuan, versus total assets
of 309.8 billion yuan, it added.
Founded by former Chinese army officer Ren Zhengfei in 1987, Huawei
has taken steps in recent years to disclose more details about its
finances and technology to counter allegations that its operations
are tied closely to the Chinese government.
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Questions have also been raised, in Britain and elsewhere, about the
potential security implications of allowing the Chinese company
access to critical networks.
The company, which has been effectively locked out of the U.S.
telecoms market after a U.S. Congressional report labeled it a
potential cybersecurity threat, scored a victory in Britain last
week when a government-ordered inspection concluded its equipment
posed no danger to Britain's national security.
CONSUMER DEVICES BUSINESS REVENUE JUMPS
Huawei's consumer devices business recorded the biggest jump in
revenue last year, up 32.6 percent, amid competition from domestic
peers Lenovo Group and Xiaomi Inc. In its enterprise division, which
builds private networks for companies and organizations, revenue
rose 27.3 percent.
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The company's carrier business, which competes with Sweden's
Ericsson for the top spot in the global market for communications
towers and other infrastructure, recorded a 16.4 percent revenue
growth in 2014.
Huawei had targeted overall revenue of $70 billion by 2018, which
translates as roughly 10 percent annual growth. The firm has said it
will invest 14 percent of its global revenues this year into
research and development.
The company missed its smartphone sales target last year in a market
dominated by Apple Inc and Samsung Electronics Inc.
($1 = 6.1969 Chinese yuan renminbi)
(Additional reporting by Gerry Shih; Editing by Richard Pullin and
Himani Sarkar)
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