A decline in sales of both consumer products and commercial equipment, US sanctions against the brand and the global semiconductor shortage in 2021 did not adversely affect Huawei’s bottom line, as the company reported CNY636.8B ($98.9B) in revenue last year, and CNY113.7B ($17.84B) in net profits, an increase of 75.9 percent year-on-year.
“Despite a revenue decline in 2021, our ability to make a profit and generate cash flows is increasing, and we are more capable of dealing with uncertainty,” Meng Wanzhou, Huawei CFO said. The enhanced profitability of its major businesses, the company’s cash flow from operating activities dramatically increased in 2021, amounting to CNY59.7B ($9.37B).
Wanzhou, was detained in Canada in 2018 sparking US-China tensions. She spent nearly three years under house arrest. She returned to China a hero as she also reported that profits soared despite the revenue drop.
“Despite a revenue decline in 2021, our ability to make a profit and generate cash flows is increasing,” Meng said responding to a question at the Huawei Annual Report press conference.
“We are more capable of dealing with uncertainty,” she added as she also replied to the question about her detainment saying that the world had “changed so much.”
Huawei’s carrier business generated CNY281.5B ($44.17B) in revenue. Third-party test results have found that 5G networks it built for customers in 13 countries, including Switzerland, Germany, Finland, the Netherlands, South Korea, and Saudi Arabia, provide the best user experience.
Its enterprise business generating CNY102.4B ($16.07B) in revenue during 2021. It launched 11 scenario-based solutions for key sectors such as government, transportation, finance, energy, and manufacturing.
The company also established multiple dedicated teams, including a Coal Mine Team, a Smart Road Team, and a Customs & Port Team, to combine resources in a way that more efficiently serves the needs of its customers. Over 700 cities and 267 Fortune Global 500 companies have chosen the brand as their digital transformation partner and it now works with more than 6,000 service and operation partners around the world.
Consumer business
Huawei’s consumer business generated CNY243.4B ($38.19B) in revenue in 2021 and continued to see steady sales growth in smart wearables, smart screens, true wireless stereo (TWS) earbuds. Rotating Chairman Ping said solving the chip problem is a complicated and long process that requires patience. In the future, chip solution may adopt a multi-core structure to improve chip performance.
Despite the heavy pressure on its profits, the company’s R&D expenditure hitting a new high, reached CNY142.7B ($22.40B) in 2021, representing 22.4 percent of its total revenue, ranked No. 2 of the EU industrial R&D investment scoreboard, 54.8 percent of the company’s staff worked in R&D with its total expenditure reaching over the past 10 years to over CNY845B ($132.60B). It will continue to invest heavily in research and innovation.
In the Philippines
Jun Zhang, Director of Huawei Asia-Pacific Public Relations Department, said during an interview with Philippine media, through US restrictions have had a huge impact on Huawei, “but despite such severe restrictions, thanks to the trust of our customers, its main business in ICT infrastructure has remained stable while new business segments like digital power and cloud grew rapidly and its ecosystem development efforts have entered the fast lane. In the context of accelerating digital transformation, there are strong market demands for innovative digital solutions and high-quality suppliers.”
The Asia Pacific region, including the Philippines, are ripe with opportunities for digital transformation, and the pandemic has accelerated it. As 5G rolls out at scale, connectivity, cloud, AI, computing, and industrial applications have all come together to create unprecedented opportunities for the ICT sector and will keep driving digital innovation for the inclusive Asia Pacific and leave no one behind.
Huawei’s investments not only went to R&D, but also to cultivating ICT talents.
‘Seeds for the Future’ is Huawei’s global CSR flagship program. Launched in 2008, the program seeks to develop local ICT talent, enhance knowledge transfer, help participants better understand the ICT sector and stimulate their interest in it, and promote and encourage participation in building a digital community.
According to Daniel Guo, the COO of Huawei Philippines, the program has been in the Philippines for 7 years and more than 200 students joined, with some of them eventually becoming Huawei employees. The program used to take two weeks in China and moved online during COVID, this year, the program might go hybrid as the situation is getting better.
Huawei ICT Academy, another non-profit program globally, serves as a bridge between companies and colleges, helping to build a talent ecosystem for the ICT industry. Huawei partnered with almost 60 Philippine universities and established ICT academies, over 9000 students joined the program.
By the end of 2021, Huawei had presented over 550,000 certifications worldwide, including over 17,000 Huawei Certified ICT Expert (HCIE) certifications. Last year, it also launched its HCIE 100 project in the country, engineers who pass the certifications will be a valuable resource for industry digitalization world.
Huawei also worked together with five top Philippine universities for Huawei Scholarship program, which aimed to provide financial assistance to deserving students who are already in their 3rd to 5th year college and has sponsored 22 scholars as of now.
In June last year, Malaya Business Insight’s Information Technology’s editor Raymond Tribdino was instrumental in connecting the Panglima Sugala Sailing School with Huawei’s VP Danny Guo to cooperate with PLDT-SMART’s “School-in-a-Bag” program. This happened during a meeting and interview that focused on exploring the technology directions of the company globally. Read the story here. — with Gregory Bautista
