ZTE Corporation, the Chinese telecommunications equipment, network solutions and mobile devices provider, issued some guidance this week (22 July 2013) for its financial results in the first-half of 2013.
Preliminary financial results show that the company achieved a net profit attributable to shareholders of RMB 302 million (£32 million) in the first half of 2013, a 23.5% increase compared with a year earlier.
ZTE said the company has now achieved two consecutive quarters of positive results. In the first half of 2013, ZTE’s revenue was RMB 37.7 billion (£4 billion), a decrease of 11.6%, a result of lower demand for GSM and UMTS products in China, and lower sales of GSM handsets and data cards.
ZTE’s gross profit margin gained in the first half, a result of improved cost controls and a focus on efficiency. The company’s sales, administrative and research and development expenses declined significantly, and the company recognized a financial gain from the disposal of a subsidiary.
In the first half of 2013, ZTE noted that the Renmenbi appreciated in value against the US dollar, resulting in less favourable foreign exchange comparisons with a year earlier. ZTE was also affected by a depreciation in the Euro, Japanese Yen and some emerging market currencies against the US dollar.
In the first half of 2012, ZTE posted 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 (as opposed to net profit cited above) in the period was RMB 656m (£65.2m), a decrease of 48.5% year-on-year.
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