At Last, ZTE Reports 2015 Financials
A beleaguered ZTE appears to be finding its feet again after a tumultuous month that has seen its shares suspended from public trading and senior executives removed following the imposition of a trade ban by the US authorities.
In early March, the Chinese vendor was hit with potentially damaging trade restrictions by authorities in the US, who accused ZTE of brokering sanctions-busting trade deals with Iran and other "rogue" states. That ban was lifted, albeit temporarily, once ZTE liaised with the US government, negotiations that eventually led to a top-level management shakeup at the vendor.
Now, having postponed its full year 2015 earnings report while it dealt with the trade ban, ZTE has published its financial report, adjusted slightly to take into account the impact of the ongoing "investigations" into its international trading. ZTE has also announced that its shares will resume trading on the Hong Kong stock exchange from Thursday morning.
The results show that ZTE had a very successful 2015, at least compared with 2014. Total revenues were up by 23% to 100.2 billion yuan (US$15.46 billion), while operating profit grew by more than 430% to RMB320 million ($49.4 million) and net income grew nearly 22% to RMB3.2 billion ($495 million).
Those numbers were adjusted to take into account the impact of the ongoing investigations by the US authorities, which has forced ZTE to alter some of its revenue recognition figures. The total sales were hardly affected but its operating profits would have been about three times higher and net income about 20% higher, according to a Hong Kong stock exchange filing.
The vendor's Carrier Networks unit reported a 30% increase in revenues to RMB57.2 billion ($8.8 billion), while the Government & Enterprise business grew 18.2% to RMB10.5 billion ($1.6 billion) and the mobile handsets line increased sales by 13.4% to RMB32.5 billion ($5 billion).
ZTE said 4G, fixed broadband and China's Industrial IoT program (called Internet Plus) contributed to domestic sales growth with carrier customers. (See China's Telcos at Heart of IIoT Plans .)
News of ZTE's financials comes only a week after its main rival, Huawei, reported 2015 revenues of RMB395 billion ($60.8 billion) and a net profit of RMB36.9 billion ($5.7 billion). (See Huawei Profits Soar Despite Forex Hit.)
For more background on ZTE's recent travails, see:
- ZTE CTO Becomes New Boss in Reshuffle
- ZTE CEO to Quit in US Export-Ban Dispute
- US Lifts ZTE Export Ban – Report
- ZTE: What On Earth Were They Thinking?
- ZTE Faces Trade Restrictions Over Iran Links
— Ray Le Maistre, , Editor-in-Chief, Light Reading