Chinese telecommunications company Huawei vowed on Friday to “shake off outside distractions” as it announced that its telecom infrastructure business contracted slightly in 2018 due to a global American campaign to blacklist the firm over spying fears.
Huawei said net profit rose to $8.8 billion last year, up 25%
However, its carrier business, which provides telecommunications infrastructure to much of the world, experienced an unusual decline, indicating that the pressure from Washington could be having a significant impact.
The firm’s carrier business was down 1.3% on the year, compared to growth of 2.5% in 2017 and annual increases typically in excess of 20% in years past.
Huawei is the leading manufacturer of equipment for next-generation 5G mobile networks that will bring near-instantaneous connectivity for smartphones, but faces resistance in some Western markets because of fears that China could acquire access to critical infrastructure.
“Security concerns are having an impact on Huawei, as more and more countries place restrictions on the firm’s network gear,” said Brock Silvers, managing director of Kaiyuan Capital.
“Moreover, the US-led global movement has only just begun and is unlikely to quickly recede even in the event of a trade war agreement.”
Huawei’s annual report, released at corporate headquarters in the southern city of Shenzhen, did not detail what caused the carrier business decline or make clear reference to the global pressure.
The company did, however, vow to continue to pursue an aggressive approach.
“Moving forward, we will do everything we can to shake off outside distractions, improve management and make progress towards our strategic goals,” rotating chairman Guo Ping said.
Huawei also is grappling with the December arrest by Canada of chief financial officer Meng Wanzhou, daughter of company founder Ren Zhengfei, on American charges that she and Huawei circumvented sanctions against Iran.
– with reporting by Agence France-Presse