China’s Huawei Technologies reported modest annual profit growth for 2020 as overseas revenues declined due to disruption caused by the pandemic and the company’s placement on a US export blacklist.

Net profit for 2020 came in at CN¥64.6-billion (US$9.8-billion), up 3.2%, compared to growth of 5.6% a year earlier.

Huawei was put on an export blacklist by former US President Donald Trump in 2019 and was barred from accessing critical technology of US origin, affecting its ability to design its own chips and source components from outside vendors.

The ban put Huawei’s handset business under immense pressure, with the company selling off its budget smartphone unit to a consortium of agents and dealers in November 2020 to keep it alive.

Yet Huawei reported that its consumer business, which includes smartphones, brought in CN¥482.9-billion, up 3.3% year on year, and accounted for over half of the company’s revenue. The rise in part was thanks to growth in devices such as smartwatches and laptops, a Huawei spokesman said.

Carrier business

The company’s carrier business, which includes 5G network equipment, brought in CN¥302.6-billion, an increase of just 0.2% a year earlier.

Huawei’s growth was driven by its home market, with revenue in China up by 15.4% to CN¥584.9-billion. Its business declined everywhere else, with revenues down 12.2% to CN¥180.8-billion in Europe, the Middle East and Africa, down 8.7% to CN¥64.4-billion in the rest of Asia, and down 24.5% to 39.6-billion yuan from the Americas.

Revenue from the company’s enterprise segment soared 23% year on year to CN¥100.3-billion, although it still makes the smallest in revenue of the three business groups. The company invested CN¥141.9-billion in R&D spending in 2020, up from CN¥131.7-billion a year earlier. Huawei’s cash flow from operating activities was CN¥35.2-billion, down by 61.5% on a year earlier. — Reported by David Kirton, (c) 2021 Reuters