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ZTE sees H1 profits tumble

Chinese telecoms equipment vendor ZTE has posted a 48% annual fall in pre-tax profits for the first half of this year, reaching CNY 656mn (US$ 103mn), although the company did see a 26% increase in domestic revenues during the period.

Based on Hong Kong Financial Reporting Standards, ZTE recorded revenues of CNY 42.64bn for the first six months of this year, up 15.2% year-on-year, including operating revenues from its domestic market of CNY 20.89bn.

Operating revenues from overseas markets reached CNY 21.76bn, up 6.2%, and ZTE reports that it has focused on growing its business in developed nations and cooperating with mainstream global carriers.

For the second half of this year, the company plans to capitalise on opportunities presented by capacity expansion and upgrades of global wireless networks, national broadband strategies and changing government and corporate smart terminal requirements.

Editor’s view: While it is by no means good news to see such a sharp drop in profits, ZTE can at least count itself in the club of major equipment vendors still in the black, for now – a club which also includes fellow Chinese firm Huawei and Sweden’s Ericsson.

Major European vendors Nokia Siemens Networks and Alcatel-Lucent meanwhile have already been forced to make substantial reductions in headcount and slim their product offerings as a result of continued periods of losses, with Alca-Lu cutting 5,000 jobs by the end of the year and NSN expected to lose fully one-third of its headcount (17,000 staff) by the end of next year.

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