Huawei posts 18.3 bln yuan profit in 2009
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Chinese telecom equipment maker Huawei Technologies said on Wednesday that its profit nearly doubled last year on booming sales, operating efficiency improvements and exchange rate gains.
The Shenzhen-based firm said in a statement that net profit for the year rose to 18.27 billion yuan from 7.85 billion yuan in 2008. Revenue rose 19 percent to 149.06 billion yuan from 125.22 billion yuan.
"The 2009 year was tumultuous for the global economy and for the entire telecommunications industry," said Ren Zhengfei, chief executive officer of Huawei Technologies, which is a privately owned firm. "We are proud to have weathered the storm, despite the challenging economic environment."
Ren attributed the company's robust performance to fast growth in countries like China and India as well as successful business expansion in developed markets like Europe, the United States and Japan.
He said Huawei Technologies is expected to see a 20 percent uptick in business growth due to advancements in mobile broadband across the world.
During the past few years, Huawei has become one of the world's biggest telecom equipment makers by charging lower prices for similar quality gear compared with its foreign rivals.
Last year, Huawei's global market share rose to 14.2 percent from 11.5 percent a year earlier, putting it in second place behind Sweden's Ericsson Telephone Co, according to a report by research firm Gartner.
The share growth was partly due to deals it made last year with several key European operators, such as Norway's Telenor ASA and Belgian telecommunications provider Belgacom SA, who traditionally are customers of Huawei's foreign rivals.
Huawei said the surge in net profit was due to a boost in sales, effective cost-control measures and exchange rate gains. If exchange gains were excluded, its net profit increased 26.5 percent, according to the firm.
Fang Meiqin, associate director of BDA China Ltd, a research consultancy, said even excluding the effects of the exchange rate, Huawei's profit growth was "surprising", as most foreign telecom equipment makers have seen their profits declining in the past few years due to fiercer market competition and the global economic slowdown.
She attributed Huawei's profit surge to the company's rapid growth in China, where profit margins were relatively higher for the company than that in other foreign counties.
According to government figures, Chinese telecom operators had spent 160.9 billion yuan to set up a third generation (3G) telecom network by the end of last year.
That, Fang said, has given companies like Huawei and ZTE Corp a serious shot in the arm. But she warned that once 3G network construction by telecom operator's was completed in a few years time, Huawei's profit growth might slow.
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