ZTE pre-tax profit falls by 48.5% in first half of 2012

Interim results for the six months ending 30 June 2012 saw revenue rise by 15% to RMB 42bn, but pre-tax profit fell by nearly 50% to RMB 656m (£65.2m) year on year

ZTE pre-tax profit falls by 48.5% in first half of 2012

ZTE Corporation has announced revenues of RMB 42.64bn (£4.22bn) for the six months ending 30 June 2012, an increase of 15.2% year-on-year. Pre-tax profit in the period was RMB 656m (£65.2m), a decrease of 48.5% year-on-year.   

During the reporting period, ZTE reported an operating revenue of RMB 20.89bn (£2.07bn) from the domestic market, accounting for 49% of the overall operating revenue and representing a year-on-year growth of 26.4%. 

From the overseas market, ZTE reported operating revenues of RMB 21.76bn (£2.16bn) during the period, accounting for 51% of its overall operating revenue and representing year-on-year growth of 6.2%. The company endeavored to enhance its market position by focusing on growing its business in developed nations and by cooperating with mainstream global carriers. It also consolidated market share in emerging markets. 

Divisional shareZTE reported revenue of RMB 21.28bn (£2.16bn) for carrier network products during the period, representing year-on-year growth of 3.9%. Terminal products revenue was RMB 14.25bn (£1.41bn), representing year-on-year growth of 27.1%. Revenue for telecommunication software systems, services and other products was RMB 7.11bn (£0.707bn), representing a year-on-year growth of 33.8%. 

Carrier network infrastructure contracts

In the first half of 2012, ZTE capitalised on growth opportunities for 4G and wireless products in Asia Pacific markets such as China, Japan and India. In July 2012, ZTE won an LTE network construction project with China Mobile in Hong Kong. The completed network will be the first dual-mode LTE network in the Asia-Pacific region. 

In April 2012, ZTE assisted Bharti Airtel, one of the largest mobile operators in India, with the launch of the first commercial TD-LTE network in Kolkata, a milestone for TD-LTE commercial network deployment in India. To date, ZTE has constructed trial and commercial TD-LTE networks in 19 countries for 33 leading global operators. Of these, nine are commercial networks. 

Government and enterprise business

ZTE also saw a 70% increase in sales in its government and enterprise business for the period ending 30 June, compared with the same period a year earlier. This was partially due to the company’s launch of data centre products and a series of smart solutions in the government and business arenas, including the Smart Mine, Smart City and Smart Traffic systems. ZTE’s videoconferencing products have also been adopted by leading operators in Europe and the United States.

Terminals business

In the first half of 2012, ZTE boasted a continued rapid growth in terminals, achieving year-on-year growth of 27.1%. During the period, ZTE entered the global top five of smartphone manufacturers, and maintained its No. 4 ranking for number of handsets shipped in the second quarter of 2012, according to IDC research. In addition, ZTE has moved into the mid- to high-end smartphone market with the recent launch of its ZTE Grand series of smartphones in several countries.

Future strategy

In the second half of 2012, ZTE will capitalise on opportunities presented by capacity expansion and upgrades of global wireless networks, national broadband strategies and changing government and corporate smart terminal requirements. 

ZTE will continue to focus on developing nations and mainstream carriers while expanding its business in the government and corporate service sectors. Meanwhile, the company will maintain its efforts to strengthen cash flow, control risk and optimise processes with a view to improving efficiency.

Written by Wireless magazine
Wireless magazine

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