Strong core business drives Huawei 2014 net profit up 33%

Huawei has published its full year 2014 financials showing growth in all business areas, which the Chinese kit vendor said was down to its focus on its networking strategy and improved overall business efficiency.

The manufacturer reported total annual revenues of CNY288.2 billion ($46.5 billion), up by 20.6% from 2013. Group net profit came to CNY27.9 billion ($4.5 billion), up by 32.7% compared to the previous year.

”Our strong revenue growth in 2014 can be attributed to a continuous focus on our pipe strategy, while profit increase stems from streamlined management and improvements in overall efficiency,” said Ken Hu, Deputy Chairman of the Board and Rotating CEO. “With heavy investment in innovation in areas such as cloud computing, big data, 5G, SDN and NFV, we believe we are well positioned to capture the tremendous business opportunities in this digital transformation era.”

In terms of its operating divisions, the carrier business unit’s full year revenue came to CNY192.1 billion ($31 billion), representing a year-on-year increase of 16.4%, which Huawei largely attributed to global mobile broadband network roll-outs. The consumer business reported an annual revenue increase of 32.6% to CNY75.1 billion ($12 billion), with especially strong growth in emerging markets. The enterprise business division’s 2014 revenues grew 27.3% to CNY19.4 billion ($3 billion), with particularly strong growth in cloud and data centre solutions, and agile networks.

Meng Wanzhou, Huawei CFO said: “In 2014, Huawei maintained effective growth and achieved steady financial performance. Our cash flow, revenue, and profit all grew over the previous year. The net cash amounted to CNY77.9 billion ($12.6 billion).

Moreover, our debt and financing structures have continuously improved. Huawei’s short-term and long-term borrowings totalled CNY28.1 billion ($4.5 billion) as of December 31, 2014, provided primarily by overseas financial institutions at market rates.”

China remains the company’s largest market, but EMEA is not far behind (see figure below). The company achieved year-on-year growth of 31.5% in China, while the EMEA business grew 20.2%. All other regions also grew.

Image source: Huawei

Huawei was keen to emphasise its view of the increasing importance of ICT and cross-industry technologies for the telecoms sector. Hu said: “As 2015 unfolds, ICT technologies, notably broadband, cloud computing, big data, and the internet of things (IoT), are becoming the engines that drive transformations in many industries.

“Huawei will continue focusing on pipe strategy to create value for our customers. Through the dedication of our employees, Huawei strives to become a strategic partner for carriers in their future transformation, a leader in providing enterprise ICT infrastructure, and a top smart device brand preferred and trusted by consumers.”