Chinese telecoms giant Huawei announced a sharp drop in its 2022 profits on Friday amid US sanctions and named its founder’s daughter to the group’s rotating presidency. Born in 1972, she had been at the center of serious diplomatic tensions a few years ago between China on one side and the United States and Canada on the other. She expected her appointment.
Huawei has been on the US administration’s blacklist since 2019 in the context of technological rivalry with China and suspicions of espionage by the Chinese authorities. This measure separates the group from global component supply chains, but also from Google’s Android operating system, present in the vast majority of the world’s smartphones. A situation that seriously weakens Huawei’s telephone branch, pushed in 2020 to separate from its entry-level brand, Honor.
In this context, Huawei announced on Friday a net profit of almost 69% year-on-year for the year 2022. The group registered a profit of 35.6 billion yuan (4.7 billion euros), compared to 113.7 billion yuan the previous year. It was then his best historical performance. On the other hand, the group’s turnover has increased slightly in one year (+0.9%), to 642,300 million yuan (85,800 million euros). In 2021, it was down more than 28%. “In 2022, a difficult business environment and non-market factors continued to weigh on Huawei’s business,” current group chairman Eric Xu admitted at a press conference.
Accused of “bank fraud”
“American restrictions are our new normal,” said Huawei CFO Meng Wanzhou, who will succeed Eric Xu as Huawei’s rotating chairman on Saturday for six months. The low-key executive had suddenly found herself at the heart of a diplomatic-judicial saga, exacerbated by a technological rivalry between the United States and China.
On December 1, 2018, Huawei number two was detained at the request of Washington during a stopover at the Vancouver airport (Canada). A few days later, two Canadians, Michael Spavor, a businessman, and former diplomat Michael Kovrig, were arrested in China, sparking a crisis between Beijing and Ottawa.
Charged with “bank fraud”, Meng Wanzhou was accused of having lied to circumvent US sanctions against Iran. A crime punishable by more than 30 years in prison in the United States, to which she was threatened with extradition. After nearly three years of procedures, Meng Wanzhou was finally released in September 2021 and returned to China. The US court definitively closed the process against her in December 2022. In March last year, during the presentation of Huawei’s annual results, Meng Wanzhou had made her first major media appearance since her legal missteps.
World’s Leading 5G Equipment Provider
Huawei was once one of the top three smartphone makers in the world, along with Samsung of Korea and Apple of the United States. The brand briefly held the number one spot, driven by Chinese demand and sales in emerging markets. Huawei did not disclose details about the number of cell phones it sold last year. The company is not listed and therefore is not subject to the same obligations to certify accounts or detail in the publication of its results as groups on the stock market.
Huawei is also the world’s leading provider of 5G equipment. But Washington has pressured allies to give up the brand to equip their 5G networks, arguing that Beijing could use Huawei to monitor communications.
The firm is now refocusing on the Chinese market and diversifying its activities, particularly in cloud computing, connected cars and chip design. Headquartered in Shenzhen, in southern China, Huawei has about 207,000 employees and is present in more than 170 countries.
Source: BFM TV
