Huawei hits $2 billion profit in 2011

Chinese networking giant Huawei has posted net profit of 11.6 billion yuan ($A1.78 billion) for the 2011 calendar year, thanks to significant growth in the company’s consumer and enterprise businesses.

CRN understands the company's Australian operation increased its revenue by 34 percent over 2010, reaching $A229 million at the end of 2011. Huawei declined to provide net figures.

Australian financial results for 2011 will be released next month.

Globally, Huawei’s sales overall grew almost 12 percent over the previous year, hitting 203.9 billion yuan ($A31.4 billion). 

Huawei’s consumer business contributed 44 percent to the overall company growth. It shipped 20 million smartphones in 2011, a 500 percent increase year-on-year, and 55 million mobile phones. Sales for the division reached 44.6 million yuan ($A6.9 million).

Traditionally known for its budget Android handsets, Huawei will soon launch its dual-core Ascend P1 smartphone in Australia. It released the $270 Vision smartphone late last year.

Huawei’s enterprise business was another strong performer despite being a new addition to the company. Huawei set up the division in 2011 to jump aboard the growing cloud trend, targeting clients in the finance, transportation, government, telecommunications, energy and other industries.

It reported over 9.2 billion yuan ($A1.41 billion) in sales revenue, an increase of 57 percent on 2010.

In the company’s annual report, acting chief executive Ken Hu said Huawei’s transformation into an complete end-to-end ICT solutions provider and investment in enterprise and consumer markets had saved Huawei from challenging global economic conditions. 

“In spite of these difficulties, Huawei basically achieved the expected business results,” Hu said.

“We increased our business investments and recruited nearly 30,000 additional employees. In addition, we adopted risk prevention initiatives to improve the quality of our contracts and to resolve transactional issues. These initiatives have laid a solid foundation for our continued growth over the next couple of years.”

He said Huawei had maintained momentum in the Asia-Pacific region thanks to growth in Hong Kong, Japan, Australia, New Zealand, in part due to the launch of several Huawei smart devices that received “outstanding feedback”. 

Huawei also posted three percent growth in its carrier network business to 150 million yuan ($A23 million).

The growth came despite ongoing allegations of the company’s links to China’s People’s Liberation Army (PLA), which has made it difficult for Huawei to win contracts around the world.

The giant was banned from tendering for Australian NBN projects late last year over security concerns, and has also run into difficulty in the United States, where it has been denied contracts and blocked from acquiring local IT companies, including most recently server technology company 3Leaf.

Huawei has been awarded contracts for NBN-style projects in several other countries including New Zealand and the UK. The Chinese company has existing commercial relationships with major Australian carriers Vodafone and Optus, and has held trials with Telstra.