Huawei posts worst annual revenue performance as US sanctions hurt telecom giant

Huawei posted its worst revenue performance last year as the Chinese telecom giant's high-profile CFO, Meng Wanzhou, who was released last year after a three-year detention in Canada over charges of violating US sanctions against Iran said on Monday that the American curbs on her firm significantly affected its profits.

Huawei, founded by her father Ren Zhengfei, reported revenue of 636.8 billion yuan (USD 100 billion) in 2021, down 28.6 per cent from 2020 following heavy sanctions imposed by the US over the past two years.

But the Chinese tech giant said in its annual report released at a high-profile press conference in its headquarters in Shenzhen that its profit rose 75.9 per cent to 113.7 billion yuan (USD 17.8 billion) despite the revenue fall.

The multiple rounds of sanctions imposed by the US have significantly affected our business, especially smartphones and PCs, Meng, 50, said in her first appearance, the Hong Kong-based South China Morning Post reported.

She was released in September last year following a deal with the US Justice Department to dismiss the charges in exchange for her accepting responsibility for misrepresenting Huawei's dealings with Iran.

Huawei is more capable of dealing with uncertainty at this time as the company reeled under US bans, Meng said, referring to the worst annual revenue performance posted by the company.

Meng, widely seen as her father's heir apparent at Huawei, projected a positive outlook for her controversial firm despite the adverse international environment due to the ongoing US sanctions.

Despite a revenue decline in 2021, our ability to make a profit and generate cash flows is increasing, she said.

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Huawei, which is China's first global tech brand diversified its business by extending its high-tech services to hospitals, mines and other industrial customers after its smartphone business, the biggest was hit by punitive sanctions banning it from accessing US components and other technology in 2019.

In 2019, the US Justice Department unsealed two cases against Huawei that detail a slew of allegations.

One of the indictment claims the company worked to skirt US sanctions on Iran, which is accused of running a nuclear weapons programme.

Meng's release was projected as a big victory for China's ruling Communist Party of China (CPC) and its powerful President Xi Jinping as her prolonged detention in Canada challenged the country's ability to protect high profile corporate heads.

Backed by the Chinese government at home and abroad, the company has a high-market share in China and 170 countries and regions where it aggressively pursued its business.

In India, Huawei's plans to join the 5G race was marred by India-China military and political tensions following the military standoff since April 2020 resulting in the crackdown on Chinese apps and businesses.

Meng was accorded hero's welcome on her return from Canada last year.

Just around the time her flight left for Shenzhen, two Canadians former diplomat Michael Kovrig and entrepreneur Michael Spavor who were arrested in China in December 2018 in tit-for-tat retaliation to Meng's arrest were taken out the prison and flown to Canada which was termed by observers as much akin to hostage diplomacy .

The official media here telecast her return live.

"Under the leadership of the Communist Party of China, my home country is becoming stronger and more prosperous day by day. Without a strong motherland, I won't have my freedom today," she had said.

"We live in a peaceful time and were born in a great country," Meng said, adding that as she grew up during the era of reform and opening-up, she had witnessed and experienced the great transformation made possible by the Chinese people under the Communist Party's leadership.

Meng described China, the CPC as the shining light that has lit up "the darkest moments" of her life and led her on the long journey home.

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