Huawei posts 53% slump in 2011 profit

Dylan Bushell-Embling
24 Apr 2012

Huawei has revealed its 2011 net profit slumped 11.6 billion yuan ($1.84 billion), as a result of heavy spending on R&D and forex losses.

The vendor recorded revenue growth of 11.7% to 203.9 billion yuan, in a result led by 44.3% growth in the company's consumer business.

Huawei shipped nearly 150 million consumer devices, including 20 million smartphones, during the year.

The company's enterprise unit meanwhile generated 9.2 billion in sales revenue during its first full year of operation as a core business group.

But this growth came at a cost, with R&D spending for the year growing 34.2% to 23.7 billion yuan.

An exchange loss of 4.87 million yuan as a result of the ongoing appreciation of the currency also contributed to the net profit decline. As did a 6.5 percentage point decrease in gross profit margin to 37.5% - which has been attributed to intense competition in the handset sector.

Despite the growth in the consumer and enterprise segments, infrastructure sales still contributed 74% of Huawei's total revenue for the year. Infrastructure revenue grew just 3% during the year to 150.15 billion yuan.

Total domestic sales revenue grew 5.5%, and overseas revenue increased 14.9%.

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