Between a trade war and a pandemic, Huawei's profits grew by just 5.6%

Between a trade war and a pandemic, Huawei's profits grew by just 5.6%

Although Eric Xu, Huawei's rotating president, indicated even before 2020 to start that 2019 was an excellent year for the Chinese manufacturer, the financial results demonstrate a different reality. Between an endless trade war seen and a pandemic with strong impacts on the technological sector, Huawei closed 2019 with profits in the order of 62.7 billion yuan, or 8.11 billion euros. The value represents a growth of only 5.6% compared to 2018, being the lowest value of the last 3 years.

Huawei financial results for 2019 compared to the previous 5 years credits: Huawei

According to the financial report presented by Huawei, total 2019 revenue grew 19.1% over the previous year, reaching 858.8 billion yuan, or about 110 billion euros. In all, the manufacturer's business showed a greater growth in China, around 36.2%. In contrast, the EMEA region (Europe, Middle East and Africa) grew by only 0.7%.

Huawei 2019 revenue by region and sector credits: Huawei

The Chinese manufacturer advances that registered a 34% growth in the consumer sector, which includes the sale of smartphones and branded equipment, although the impact of the trade war between the United States and China was felt, in particular, by from its entry into the blacklist of the Donald Trump Government in May 2019. Nevertheless, Huawei indicates that, in all, in 2019, 240 million smartphones were shipped to stores worldwide, representing an increase of 15% compared to 2018.

The company says that, although it feels immense external pressure, business remains solid. However, Eric Xu points out that due to the restrictions implemented by the United States and the consequences of the COVID-19 pandemic, the future may be more complicated, so the company is adapting the business taking into account the current circumstances.

It is recalled that, in the most recent chapter of the trade war saga, the United States is preparing to "cut" the supply of Huawei processors, even with constant comments on the final decision of the administration of Donald Trump. The application of the measure has already been studied and needs only the approval of the President to proceed. Thus, manufacturers using American technology, such as TSMC, may have to apply for a special license to continue doing business with the Chinese manufacturer.