The rotation CEO of Huawei Eric Xu has told CNBC the slowing profit growth in 2019 was due to the U.S. blacklisting the Chinese technology giant from doing business with American firms.
Meanwhile, a top executive at the company told CNBC the impact from the coronavirus on its business is unclear.
Revenue for last year totalled 858.8 billion yuan ($123 billion), a 19.1% year-on-year rise in yuan terms. Net profit came in at 62.7 billion yuan ($9 billion), marking a 5.65% rise from last year. That’s slower than the profit growth of 25% reported in 2018 and 28% in 2017.
Eric Xu, rotating chairman at Huawei, told CNBC in an interview Tuesday that the company has failed to meet its own targets. At the start of 2019, Huawei propelled revenue of around 858.8 billion yuan or $123 billion, which it ultimately ended the year with. But in April of last year, it was preparing to amend that target to $135 billion.
Read also: Huawei Nova 7i features, specs and review
In May, regardless, the company was put on the U.S. Entity List. A blacklist that sought to restrict American companies from doing business with Huawei. Companies like Google which had been doing business with Huawei for years no longer allowed to license its Android mobile operating system to the Chinese tech giants.
Xu, however, attributed $12 billion shortfall to the ban from the Trump government.
We didn’t meet our revised targets, which was the $135 billion mark. We were short by $12 billion. This was the results of the U.S. sanctions.
We had to deal with the challenges around the supply continuity and we had to address the supply challenges in the short term, so as to supply certain products to our customers. And we also had to increase our R&D (research and development) investment.
Xu told CNBC on Tuesday.