Huawei Australia sees large profit and revenue growth while skirting ban impact
Huawei Australia experienced an 18% spike in revenue over the course of 2018, as the Australian arm of the Chinese giant collected receipts of AU$735 million compared to AU$623 million in the year prior.
Broken down by revenue type, the company saw revenue growth across the board: It increased goods sales by 19% to AU$417 million, revenue from services jumped 22% to AU$154 million, with construction payments growing by 12% to AU$164 million.
With the cost of sales increasing by 21% to AU$597 million, Huawei Australia had pre-tax profit of AU$38.7 million against AU$32 million in 2017. For the year to December 31, 2018, the company paid AU$9.3 million in income tax, whereas it paid AU$16.3 million for 2017, which led to the company posting an 89% jump in post-tax profit to AU$29.3 million.
The amount spent by the company on wages in 2018 fell from AU$49.4 million to AU$47.5 million, as it reported having 343 employees. For research and development, expenditure was steady at AU$4.7 million, however the amount of tax incentives gained dropped from AU$0.51 million to AU$0.13 million.
During 2018, the Chinese giant found itself banned from 5G rollouts in Australia, which resulted in TPG announcing it would cease the building out of its mobile network.
Despite this, the company optimistically claimed the ban “may reduce the scale and growth in the carrier network business”.
“The company will continue to pursue its objective of increasing its profitability and market share during the next financial year, with a particular focus on the enterprise and consumer business,” Huawei Australia said in its filing to ASIC.
Huawei is having better luck in the United Kingdom than Australia, where it has been allowed to deploy 5G equipment despite a report pointing out significant flaws in its equipment.
Last week, the Chinese parent company announced first quarter earnings that saw revenue jump by 39% to 180 billion yuan as it sold 59 million smartphones.
The company has previously said it wanted to be the biggest smartphone brand overall by 2020.
Huawei Australia made its filing with ASIC with an air of defiance, stating it does not believe it is a reporting entity.
“The company is not publicly accountable,” the filing said.
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