Huawei expects revenues in 2021 to fall by 28.9% as sanctions drag on

BEIJING – Chinese telecommunications giant Huawei said on Friday that it expects revenue for this year to reach 634 billion yuan ($ 99 billion), down 28.9 percent from a year ago.

The company has suffered from US sanctions, semiconductor shortages and a global decline in demand for smartphones.

The full-year estimate for 2021[ads1] indicates that Huawei’s second-half revenue fell from the first six months to 313.6 billion yuan, from 320.4 billion yuan.

The company reported 891.4 billion yuan in revenue in 2020, up 3.8% from the previous year. This is far slower than the 19.1% year-on-year increase reported for 2019, with a turnover of 858.8 billion yuan.

Friday’s release came as part of an internal New Year’s announcement from Huawei’s rotating chairman Guo Ping, which focused on gathering employees to push.

The letter did not specify the reasons for the fall in expected income, but noted “serious challenges” from “an unpredictable business environment, the politicization of technology and a growing globalization movement,” according to an English-language version seen by CNBC.

Guo added that “over the past year, our carrier business has been stable, our business has experienced solid growth, and our unit business has expanded rapidly to new business domains.”

For next year, Guo said the company’s goals include increasing efforts to build and attract talent, and developing car-related technologies.

Last week, Huawei announced that the first electric car with the HarmonyOS operating system will probably begin delivery in late February.

Huawei usually releases its more detailed annual report in March.

Figures for the first half of 2021 showed that the two largest business segments, consumer and carrier, had a sharp decline from year to year. The much smaller enterprise, which has become central to Huawei’s growth strategy, grew by 6.6 billion yuan.

In 2019, former President Donald Trump’s administration put Huawei on a blacklist that restricted US companies from selling technology to the Chinese company, citing national security concerns. Huawei has denied that it poses such a threat.

Although these restrictions have not eased, other tensions between Huawei and the US government have.

CFO Meng Wanzhou, daughter of founder Ren Zhengfei, returned to work at the company’s headquarters in Shenzhen this fall after reaching an agreement with the US government on allegations of electronic fraud.

Meng had fought against extradition to the United States from Vancouver, where she was arrested in December 2018. She spent most of the last three years under house arrest, where her bail of 10 million Canadian dollars (7.9 million dollars) allowed her to venture out during day of security tracking.