Huawei’s Irish unit grows profit despite drop in revenues

Huawei’s main Irish subsidiary has reported a 10.5 per cent decline in full-year revenues but profits remained stable despite what the company called “numerous complex challenges”.

The Chinese telecoms giant, which earlier this year announced plans to create 110 new jobs and invest €80 million in research and development activities in the State, recorded turnover of €147.5 million for 2020. This compares to revenues of €164.8 million a year earlier.

Pretax profits of €5.99 million were 8 per cent ahead of the €5.53 million recorded in 2019. The company said it approved and paid a €3 million dividend to its parent.

The Irish subsidiary’s relative strong financial performance came despite the impact of the Covid crisis and restrictive sanctions from the US government that have made it more difficult for its Chinese parent to operate.

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“Despite the difficult environment, due to unfailing trust and support of customers and partners, backed by the solidarity and dedication of employees, the company persevered through a difficult year for all,” Huawei said.

In the prior year, Huawei Technologies Ireland had reported a 38 per cent jump in turnover from €119 million. It employs more than 200 people across facilities in Dublin, Cork and Athlone.

The company has a broad range of activities in the Republic, where it counts all major telecommunications providers as customers. As well as its core business, Huawei transferred many of its mobile software services to an Irish-based subsidiary called Aspiegel in 2019.

A breakdown of revenues shows €87.7 million derived from sales of goods with the remainder resulting from rendering of services. Some €115 million of turnover came from Ireland with a further €7.7 million deriving from mainland Europe.

Staff costs fell last year to €27.4 million from €29.8 million even as headcount rose.

Founded in 1987 in Shenzhen, Huawei employs about 197,000 people globally, of which just over half work in R&D. While initially focused on manufacturing phone switches, the company has significantly expanded its business over the years to include building infrastructure equipment used in mobile and broadband internet networks, including for 5G.

Groupwide, Huawei recorded revenues of $136.23 billion in 2020. However, turnover dropped by almost a third in the first half of 2021 to $49.71 billion, with US sanctions continuing to hobble its once-dominant handset business.