As it faces political challenges in the US and UK, Huawei has reported that its revenue reached $64.88bn in the first half of 2020.
Late on Monday (13 July), Huawei announced its results for the first half of 2020 from Shenzhen, China. Despite the challenges that the technology company has come up against recently, it reported a 13.1pc year-on-year increase in revenue.
While revenue was up, reaching $64.88bn in the first half of 2020, the latest earnings report marks the slowest first-half revenue growth the company has seen since 2013.
It finished the first two quarters with a net profit margin of 9.2pc, which is an increase from 8.7pc in the same period last year. According to Huawei, its carrier business accounted for 35pc of total revenue, its enterprise arm accounted for 8pc and its consumer business accounted for 56pc.
Challenges associated with Covid-19
In a statement, Huawei said that technology has become “crucial” during the coronavirus pandemic and the economic fallout.
The company said: “As countries around the globe are grappling with the Covid-19 pandemic, information and communications technologies have become not only a crucial tool for combatting the virus, but also an engine for economic recovery.
“Huawei reiterated its commitment to working with carriers and industry partners to maintain stable network operations, accelerate digital transformation and support efforts to contain local outbreaks and reopen economies.”
The company added that the complicated external environment makes open collaboration and trust in global value chains “more important than ever”.
“Huawei has promised to continue fulfilling its obligations to customers and suppliers, and to survive, forge ahead and contribute to the global digital economy and technological development, no matter what future challenges the company faces.”
Obstacles in the US and Europe
The company did not provide a breakdown of its regional sales, but as more obstacles emerge for Huawei’s business in Europe and the US, TechCrunch said that it’s “reasonable” to expect that China is the source of its growth.
In the US, Huawei was recently designated as a national security threat, meaning that US telecoms firms are banned from spending government money on equipment from the Chinese business.
According to Federal Communications Commission chair Ajit Pai, the decision was made due to Huawei’s “close ties” to the Chinese Communist party. Pai said that these close ties could obligate the company to cooperate with China’s intelligence services.
Huawei’s latest earnings report was published a day before UK officials are expected to order the removal of Huawei equipment from the country’s 5G networks. Critics of the decision have warned that a sudden and forced withdrawal could result in network outages and security risks for the UK.
Speaking on BBC Radio 4 yesterday, BT CEO Philip Jansen said: “Security and safety in the short term could be put at risk. This is really critical – because if you’re not able to buy or transact with Huawei that would mean you wouldn’t be able to get software upgrades if you take it to that specificity.
“Over the next five years, we’d expect 15 to 20 big software upgrades. If you don’t have those you’re running gaps in critical software that could have security implications far bigger than anything we’re talking about in terms of managing a 35pc cap in the access network of a mobile operator.”