Huawei Australia battered in 2020 with 5G ban and consumer sales diving

The Australian arm of Huawei shed itself of 113 employees and its board during a tumultuous 2020.
Written by Chris Duckett, Contributor
Image: Getty

Huawei Australia is seeing its footprint shrink in Australia, both on a sales and organisational level.

For the year to 31 December 2020, the Australian arm of Huawei reported revenue almost halving from the AU$658 million posted last year to AU$356 million.

Broken down, the company saw its carrier business continue to fade away, falling from AU$460 million to AU$217 million, its consumer business plummeted from AU$148 million to AU$84 million, while its enterprise revenue was a rare bright spot, increasing by AU$5.5 million to AU$55 million.

In terms of net cash flow, the company had receipts of AU$408 million, paid out AU$414 million to suppliers, employees, and related entities, and thanks to a AU$11 million income tax refund, was able to post positive cash flow for the year of AU$4.1 million.

Huawei Australia disclosed it had boosted the dividend paid during the year to AU$43 million, up from AU$7.2 million. Huawei Australia's immediate parent company is based in the Netherlands, with its ultimate parent being Huawei Investment and Holding Company based in China.

The company also revealed the scale that it has cut back its Australian operations.

During the year, it cleaned out its six person board, replaced by a trio of new members, and its employee number fell by 113 persons to 145. The wages and salaries line item dropped from AU$47.5 million to AU$28.7 million, with total employee benefits that include bonuses almost halved from AU$96 million to AU$59.5 million.

All up, it gave Huawei Australia pre-tax profit of AU$17.1 million for 2020, compared to AU$33.8 million for the year prior, which translated into a post-tax profit increase from AU$6.43 million to AU$9.73 million once the much lower income tax expense, AU$7.4 million compared to AU$27.4 million in 2019, was taken into account.

"The company will continue to pursue its objective of increasing its profitability during the next financial year, with a particular focus on the enterprise and consumer business," Huawei Australia said.

"However, the scale in the carrier network business will continue to decline as a results of the 5G government announcement in 2018."

Last week, the Huawei mothership reported its first quarter sales were down 16.5% compared to last year, but was an expected result.

Revenue for the Chinese giant was reported at 152 billion yuan, with its carrier business remaining steady and its consumer business seeing sales decrease, thanks to its decision to sell off the Honor brand last year.

For the full year, Huawei posted net profit of 64.6 billion yuan, but its growth in markets outside of China grounded to a halt.

In 2020, China was the only region where Huawei saw an uptick in revenue as it grew by 15.4% to 585 billion yuan. Meanwhile, Europe, the Middle East, and Africa, the Asia Pacific, and Americas all saw revenue declines ranging from 8.7% to almost 25%.

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