ZTE confirmed a net loss of CNY 6.98 billion for 2018, hurt by the USD 1 billion payment to settle its dispute with US authorities. The company said it returned to a profit in Q1, estimated at CNY 0.8-1.2 billion compared to a loss of CNY 5.4 billion a year earlier.
The result compares to a profit of CNY 4.3 billion in the full year 2017. The annual loss for 2018 was in line with ZTE's earlier guidance in October, when it said it returned to a small profit in Q3. It also included an impairment charge of CNY 1.1 billion on its 49.9 percent stake in the company Nubia Technology.
Operating revenue for 2018 fell to CNY 85.51 billion from CNY 108.8 billion reported in 2017, after the company was forced to suspend operations for several months in 2018 due to a US ban on business with ZTE. Revenues in China accounted for nearly 64 percent of the total and fell by 12 percent from 2017 to CNY 54.44 billion. ZTE said it had a positive operating cash flow of CNY 1.01 billion in the last quarter of 2018, compared to a negative CNY 9.22 billion over the full year.
ZTE said it spent 12.8 percent of revenues in 2018 on R&D, equal to CNY 10.9 billion. The company confirmed that its first 5G smartphone will go on sale in the first half of this year and it will continue to focus on 5G innovation in 2019.
