ZTE expects US$178 million first-half profit as it boosts R&D spending for 5G development
- First-quarter revenue was 22.2 billion yuan, down 19.3 per cent from the first three months of last year
ZTE Corp, China’s second largest telecommunications equipment manufacturer, is predicting a turnaround in its business this year, with a projected net profit of between 1.2 billion yuan (US$178 million) and 1.8 billion yuan in the first half, compared to the 7.8 billion yuan loss during the same six-month period in 2018, as business continues to improve after a near-death experience last year.
Net profit was 863 million yuan for the three-month period ending March compared with a 5.4 billion yuan loss in the same period last year, ZTE said in a statement to the Shenzhen Stock Exchange on Monday evening.
First-quarter revenue was 22.2 billion yuan, down 19.3 per cent from the first three months of last year, according to the company.
The projected turnaround would follow ZTE’s record annual loss of 6.98 billion yuan in 2018 after the company ceased major operating activities for nearly four months from April because of sanctions imposed by Washington as punishment for violating US export rules.
In June, Shenzhen-based ZTE agreed to pay an additional US$1 billion in fines to the US Department of Commerce and put up US$400 million as surety as part of its settlement for violating US prohibitions against selling American equipment to Iran. The agreement also required the company to replace its board and terminate all executives ranked above senior vice-president, as well as anyone involved in the Iran violations.
ZTE is bidding on the commercialisation of the next-generation 5G networks which has intensified its research and development (R&D) investment in core 5G areas, the company said in the statement.
