China's Huawei Technologies said its profit more than doubled last year and forecast strong revenue growth in 2010, fed by an ambitious export drive and strong 3G spending in its home market.
Net profit at the privately held company, the world's second largest telecoms equipment maker, rose to 18.3 billion yuan ($2.7 billion) from 7.8 billion yuan the previous year, according to a report whose figures Huawei said were audited by KPMG.
Despite the hefty profit gain, the company, second globally to Sweden's Ericsson, said its revenue grew 19% to 149.1 billion yuan, down from the 33.5% growth rate the previous year, as global telecoms spending slowed at the height of the global downturn.
It said cash flow from operating activities last year jumped 237% to 21.74 billion yuan.
“We see our business momentum continuing in 2010 and expect year-on-year revenue growth of 20%, driven by increased deployments of mobile and fixed broadband networks, further take-up of customized smart devices and higher demand for professional managed services,” Chief Marketing Officer Ken Hu said in a statement.
As an unlisted company, Huawei voluntarily releases its annual operating results. Hometown rival ZTE, listed in both China and Hong Kong, reports its results as part of its listing requirements. It is scheduled to report its 2009 results next week.
Figures in Huawei's latest report showed that profit grew 3.8% in 2008, a sharp downward revision from the 20% growth it initially reported last year. Revenue growth for 2008 was also revised downward to 33.5% in the latest report, from an originally reported 43%.
Huawei and ZTE have taken on the likes of global names like Ericsson, Nokia Siemens Networks and Alcatel Lucent in recent years on the global stage, winning major contracts in both developing and developed markets.
The Chinese companies initially used their price advantage over their Western rivals in their march overseas, but have become increasingly service-oriented as they go head-to-head with those rivals in the most lucrative Western markets.
In one of its biggest coups to date, Huawei won the main contract last year to build a fourth-generation (4G) network in Ericsson's backyard for Norway's Telenor.
Huawei, which has previously said it would consider an initial public offering but has never given specifics, said one of its main focuses in 2009 remained the transformation of its internal management processes.
“We are moving away from centralized governance to a more decentralized structure, allowing organizations and employees who serve customers directly to have more decision-making power,” the company said in its statement. (Reuters)