ZTE Corporation, the Chinese mobile infrastructure and devices manufacturer, today (21 January 2013) announced losses of between CNY 2.5bn and CNY 2.9bn (£252m-£293m) in its preliminary results for the year ended 31 December 2012. This represents a decrease in profit of 221% - 240% compared with 2011 when the company posted a profit of CNY 2bn (£202m).
ZTE did not disclose its revenues for 2012 only revealing that the operating revenue of the company in 2012 dropped slightly over last year – total operating revenue in 2011 was CNY 86.2bn (£8.7bn), according to the 2011 annual report.
The company did reveal that operating revenue for the fourth quarter of 2012 decreased by approximately 18% compared with same period last year. 2012 also saw a decrease in overall gross profit margin of approximately 7 percentage points.
ZTE attributed its losses in 2012 primarily to the combined effects of, among others, postponed execution of certain systems contracts and decrease in revenue from terminals in the domestic market, along with delayed progress of certain international projects.
The overall gross profit margin of the company for the fourth quarter of 2012 decreased by approximately 11 percentage points as compared to the same period last year, reflecting primarily a larger number of low-margin contracts in Africa, South America, Asia and the domestic market recognized for the current period.
ZTE said it will disclose final results figures in its annual report for 2012. The company’s fortunes are in marked contrast to rival Chinese manufacturer Huawei, which announced a profit of £1.5bn for 2012 on revenues of £22.2bn today.
See also: Huawei profit up 33% to £1.5bn on revenues of £22bn in 2012