ZTE expects to report loss of at least US$1 billion for first half of 2018
Chinese telecommunications equipment maker ZTE Corp, which was hit with a trade ban by the United States earlier this year, expects to report a net loss of 7 billion yuan (US$1.04 billion) to 9 billion yuan in the first six months of 2018, the company said in a regulatory filing on Friday.
The Shenzhen-based company reported a profit of 2.29 billion yuan for the same period a year ago, it said, and attributed the decline this year, in part, to “the suspension of major operating activities”.
ZTE, which is listed in Hong Kong, last week appointed a new chief executive, three executive vice-presidents and 17 senior vice-presidents, after terminating the employment contracts of former senior management staff as part of a settlement deal with the US for breaches of a US export ban on doing business with Iran and North Korea.
The company also paid US$1 billion in fines and set aside US$400 million as escrow last month, which has resulted in a temporary lifting of the crippling ban that lasted about three months.
ZTE is now allowed to receive shipments from its American suppliers, according to a notice published on the Bureau of Industry and Security website last week. However, the US Congress is continuing to debate measures that are likely to keep some form of penalty on the grounds of national security concerns.
The new management team will head its key businesses, including carrier networks, telecoms equipment and smartphone sales.
Shares in the companies slumped by 1.4 per cent in Hong Kong to close at HK$13.74 on Friday.