Huawei continued to make money in 2020 despite receiving bans from various countries around the world, posting 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. Looking at the numbers, revenue from China grew by 15.4% to 585 billion yuan. Meanwhile, Europe, the Middle East, and Africa (EMEA), the Asia Pacific, and Americas all saw revenue declines ranging from 8.7% to almost 25%.
Huawei explained in its annual report that losing access to the Android ecosystem for its smart devices was the largest contributor to these drops in revenue.
The company lost Android support two years ago when the US Department of Commerce added Huawei to its Entity list because it believed Huawei was engaged in activities that were contrary to US national security or foreign policy interests.
When a company is on the Entity list, US companies are banned from transferring technology to them unless the US company has received licence approval from the US government.
Huawei's annual operating profit also dipped for the first time in over five years to 72.5 billion yuan for 2020 -- Huawei earned just over 73 billion yuan and nearly 78 billion yuan in 2018 and 2019, respectively -- but net profit continued to see slight growth due to lower operating costs during the year.
As the Chinese networking giant continues to navigate the US sanctions among other bans -- such as in Australia, Sweden, and the UK -- Huawei credited its sustained net profit to its consumer and carrier businesses maintaining stability in the Chinese market.
Huawei wrote in its 2020 annual report that the consumer and carrier businesses earned annual revenues of 483 billion yuan and 302.6 billion yuan, respectively, which were relatively the same figures from the year prior.
The company added that its enterprise business stepped up efforts to develop new products for companies, which resulted in revenue growing by 23% year-on-year to just over 100 billion yuan.
Providing an update on the status of Huawei's sale of its Honor sub-brand to Shenzhen Zhixin New Information Technology, which came as a result of the bans placed on it from Washington, Huawei's rotating chairman Hu Houkun said the handover of Honor has been delayed by the COVID-19 pandemic but it would be completed no later than June 30.
Hu also provided the company's outlook for 2021, writing in the annual report that the company expects to continue to be in a complex and volatile global environment.
"Resurgence of COVID-19 and geopolitical uncertainty will present ongoing challenges for the global community," he said.
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