Huawei Australia pre-tax profit almost doubled in 2015

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Huawei Technologies Australia has reported its financial results for the calendar year ended December 31, 2015, recording a pre-tax profit of AU$18.6 million — nearly double last year’s AU$9.6 million.

The Chinese technology giant also grew its Australian revenue, which rose by 32.7 percent year on year, from AU$484 million up to AU$642.2 million as of the end of December.

A breakdown of its revenue saw the sale of goods contribute AU$499.1 million; service contribute AU$116.2 million; and construction account for AU$26.9 million.

Net assets stood at AU$49.66 million, rising by 40 percent from the AU$35.48 million reported in December 2014, while cash and cash equivalents were AU$36.52 million, up by 60.6 percent from last year’s AU$22.74 million.

One area that fell over the year, however, was research expenses; Huawei Australia last year spent AU$8.251 million, down 18.1 percent from the year before, when it spent AU$10.077 million.

Huawei has traditionally put a lot of focus on its research and development (R&D) activities, with more than 79,000 R&D engineers, amounting to 45 percent of its total workforce, 16 R&D centres and 36 joint innovation centres worldwide — including a AU$30 million National Training and Innovation Centre in Sydney, as well as centres in China, Germany, Sweden, Russia, and India — and invests at least 10 percent of its sales revenue back into R&D each year, with 15.1 percent of its 2015 global sales revenue being invested last year.

Huawei also filed the highest number of patent applications worldwide during the course of 2015, making 3,898 applications, according to the World Intellectual Property Organization. Trailing were Qualcomm, which filed 2,442 patent applications; ZTE, which filed 2,155; and Samsung, which filed 1,683.

According to Huawei, it has had a total of 50,377 patents authorised, with 52,550 patent applications made in China and 30,613 patent applications made outside of China.

Globally, Huawei recorded an FY15 net profit of 36.9 billion yuan ($5.7 billion) — a 33 percent year-on-year rise — on revenue of 395 billion yuan ($60.8 billion), which was largely attributed to its consumer business.

Described as “a major highlight” of the tech giant’s results, consumer grew by 73 percent over the year to reach 129.1 billion yuan ($19.9 billion) due to the increasing popularity of its handsets; Huawei shipped 108 million smartphones worldwide over the year.

Huawei’s global carrier business made 232.3 billion yuan ($35.8 billion) in revenue, a 21 percent rise year on year, while its enterprise was up 44 percent, to 27.6 billion yuan ($4.3 billion).

Huawei Australia chairman John Lord earlier this month outlined the company’s plans topush ahead in the Australian consumer and enterprise business segments, saying it should leverage its influence in Europe to gain more local awareness.

“Our problem in Australia is still we’ve got to get people to know Huawei, because they don’t still — we do surveys and we’re still chipping away — but in Europe it’s a lot bigger,” Lord said.

“I think we need to let Australia know we’re playing one of the lead roles in Europe, too, as part of our branding and image.

“We have two roles today: One is still to get consumer land to be able to say our name and buy our mobile devices, which we’re putting a fair bit of effort into, and the second one is still to say to business, ‘hey, we are one of the smartest companies in the world and we can take your business end to end, wire to wire’.”

Huawei is also aiming for deeper penetration within the consumer space, with rotating CEO Eric Xu saying that the company’s goal is to become the number one consumer brand in the world.

“We will leverage the technical expertise we’ve been building over the last decades, and try to build a premium brand, or high-end brand. We want to make it the top brand throughout the world. At the same time, we want to capture consumers’ recognition through service and quality,” Xu said at the Huawei Analyst Summit in Shenzhen.

“We’re committed to building an ecosystem with consumers in the centre, so as to improve stickiness or loyalty of consumer customers. We want to leverage our own strengths, and we want to engage with consumers in the right way … build our consumer brand into a trusted and loved brand.”

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