Huawei to cut dividend payments to employees after projected revenue slump amid US sanctions

Huawei could end up paying out more than 35 billion yuan in total cash dividends, based upon the outstanding 22.2 billion shares as of December 2018

The company is diversifying into mining technology and smart electric vehicles to broaden its revenue streams after losing its smartphone business

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Published: 7:00pm, 7 Feb 2022Updated: 8:15pm, 8 Feb 2022

Chinese telecommunications giant Huawei Technologies Co will pay a smaller cash dividend to “shareholding employees” for 2021, after projecting a one-third loss in revenue because of US trade sanctions, according to a report by local media China Business News.

The privately-held company, which is 99.25 per cent owned by a trade union controlled by current employees, is expected to pay a 1.58 yuan (25 US cents) per share dividend to each of its 121,269 “shareholding employees”, the newspaper reported on Sunday. Huawei founder Ren Zhengfei holds a 0.75 per cent stake in the company, according to corporate registry information on Tianyancha.

Huawei could end up paying out more than 35 billion yuan in total cash dividends, based upon the outstanding 22.2 billion shares as of December 2018. Ren would be entitled to 260 million yuan (US$40 million) in cash dividends, according to a calculation by the South China Morning Post.

Huawei did not publicly release its dividend plan.

The 1.58 yuan dividend per share for 2021 would be about 15 per cent less than the 1.86 yuan per share distributed in 2020, a reflection of its business woes.

Huawei rotating chairman Guo Ping said last December that the company would see a 28.9 per cent decline in total revenue to 634 billion yuan for 2021, as Washington’s ban on the company acquiring advanced chips crippled its lucrative smartphone business.

Huawei is diversifying into mining technology and other sectors to broaden its revenue streams. A key new area is smart electric vehicles, with the goal of helping carmakers better equip their vehicles with intelligent functions such as autopilot, a trend that has picked up amid attempts to commercialise autonomous driving technology.