ZTE posts 15.4% revenue increase year to date
30 October 2020 | Melanie Mingas
Chinese equipment manufacturer ZTE Corporation has posted its latest financial results confirming a 15.4% increase in revenues in the first three quarters, reaching RMB 74.13 billion (US$11 billion).
In Q3, ZTE’s operating revenue reached RMB 26.93 billion ($4 billion), representing a year-on-year increase of 37.2%. Net profit attributable to shareholders amounted to RMB 0.85 billion, and net profit after extraordinary items attributable to holders of ordinary shares of the listed company amounted to RMB 0.54 billion.
The news came despite sales bans in several markets, most recently Sweden, where both ZTE and Huawei are now unable to sell 5G equipment to the country’s telcos. Similar moves are being explored by India.
In its statement to the market, ZTE said the results were bolstered by “sustained investment in R&D and great commitment to developing new 5G industrial landscapes”.
The statement continued: “During the period, ZTE focused on innovations and sustained high investment in R&D, continuously enhancing its core competitive advantages in the 5G era. For the first nine months, the company’s R&D expense reached RMB 10.79 billion, making up 14.6% of nine-month revenue, a year-on-year increase of 15.3 %. The company has proposed its fourth A-share option incentive scheme, covering over 6,100 employees, in a bid to strengthen the incentives to the top key talents.
“As a road builder of the digital economy, ZTE has been committed to empowering the digital and intelligent transformation of thousands of industries by building ‘ultimate networks’, ‘precision cloud networks’ and ‘empowerment platforms’.”
Commenting on the operational environment in 2020, there was mention of the impact of Covid-19 but the various equipment sale bans that now apply to ZTE globally were not directly addressed.
On Covid-19, ZTE “proactively explored the network and industry potential” required to maintain stable operations, despite the Coronavirus and what it termed a “complicated international situation in the first three quarters of 2020”.
On 5G, ZTE said: “Seizing the opportunity of rapid 5G development in China, ZTE has explored 5G industry application innovations in partnership with its customers and partners to activate the industry and market vitality and thereby achieved rapid business growth. Moreover, the company has continuously maintained healthy operations in overseas markets by exploring high-value markets and promoting stable business development in pivotal countries.”
In July, ZTE and the Hunan branch of China Telecom jointly launched China's first commercial 5G SA Massive MIMO 1+X SSB (synchronization signal and PBCH block) site with three-dimensional coverage on 3.5 GHz.
As of September-end, ZTE counted 55 commercial 5G contracts globally, partnerships with more than 90 operators worldwide in 5G arena, and more than 500 industry partners. This included the partnership announced in April that will see ZTE partner with Ericsson and Huawei to supply China Mobile.
On 6G, ZTE announced in May that it would be working with China Unicom to explore new technologies.