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Overseas markets spur Huawei's 8 percent revenue growth

The Europe, Middle East, and Africa region contributed most to Chinese telecom vendor's overall revenues in 2012, which jumped 8 percent from 2011 to 220.2 billion yuan.
Written by Jamie Yap, Contributor

Chinese telecoms equipment giant Huawei Technologies said its global sales revenue in 2012 increased 8 percent from the year before to reach 220.2 billion yuan (US$35.4 billion), with the majority of revenue generated from outside its domestic market.

Cathy Meng (Credit: Huawei)

In a statement issued Monday, Huawei CFO Cathy Meng noted that 66 percent of the company's overall revenue for 2012 came from outside China. Europe, the Middle East, and Africa (EMEA), for one, contributed 77.4 billion yuan (US$12.4 billion), while Asia-Pacific, excluding China, generated 37.4 billion yuan (US$6 billion), and the Americas contributed 31.8 billion yuan (US$5.1 billion).

By comparison, the Chinese market recorded 73.6 billion yuan (US$11.8 billion) last year. About 70 percent of Huawei's revenue was generated from serving leading telecommunications operators, including 45 of the world's top 50, Meng added.

The company recorded a net profit of 15.4 billion yuan (US$2.4 billion) as a result, which represents a significant jump from 2011, she noted.

Core telecom business still leads revenue growth

The executive attributed Huawei's "effective growth" in 2012 to its focus on customers, streamlining management and improving efficiency.

"The company has invested in and developed its carrier network, enterprise and consumer businesses in order to provide faster, broader, and smarter information services to its customers, while addressing the challenges and opportunities in the era of big data," she said.

"We [also] insist on strictly controlling G&A [general and administrative] expenses and allocate more resources to bolster the front line and ensure continuous improvements on customer delivery and service quality. In addition, Huawei continued its ongoing management transformation, raising combined operating efficiency with an integrated financial services program," the CFO added.

Delving deeper into individual business groups, Meng said that the carrier network unit led with sales revenues of 160.3 billion yuan (US$25.7 billion). The consumer business group reached a record 48.4 billion yuan (US$7.7 billion), thanks to growing sales in developed markets such as Europe and Japan, while the enterprise business contributed 11.5 billion yuan (US$1.8 billion), she said.

In terms of research and development (R&D) activities, Huawei invested 29.9 billion yuan (US$4.8 billion) in 2012 — which accounts for 13 percent of the year's revenue, she said. This also means the company has spent a total of 120 billion yuan (US$19.2 billion) in R&D activities over the past 10 years, she added.

Tech convergence brings opportunities

Looking to the future, Meng said she is positive about the info-communications technology (ICT) industry's future growth prospects thanks to the challenges and opportunities brought about by the convergence of mobile Internet, smartphones, and online and offline worlds.

"Huawei believes that pipes [communications network infrastructure] with large bandwidth that can transmit and process massive data flow are the key to addressing these challenges, and are also Huawei's key growth driver in the future," she said.

With these factors in mind, she expects overall revenue for Huawei to grow 10 percent to 12 percent in 2013.

The 2012 financial report was audited by KPMG, and the full annual report will be available in April, the company added.

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