ZTE said it expects its net result for the first half of this year to sink to a loss of CNY 7-9 billion from a profit the year before of CNY 2.29 billion, a decline of 405-492 percent. The preliminary basic loss per share is seen at CNY 1.67-2.15 from earnings of 0.55. ZTE attributed the sharp declines to the suspension of its operating activities as a result of the export ban imposed by the US government on the Chinese company.
ZTE recently said it was a step closer to resuming business with the US, after the US Department of Commerce signed the earlier announced escrow agreement with the company. Once ZTE deposits USD 400 million in the escrow account, the ban on exports to ZTE from the US will be lifted, the department said. Under the agreement, ZTE will pay civil monetary penalties totalling USD 1.4 billion, including a lump sum payment of USD 1 billion to be paid within 60 days and an additional suspended penalty of USD 0.4 billion to be placed within 90 days in an escrow account with a US bank selected by ZTE and approved by BIS.
In exchange, BIS will terminate the denial order activated on 15 April and remove ZTE from the Denied Persons List. A new denial order will also be suspended during the Probationary Period, and thereafter be waived subject to ZTE's compliance with the agreement.
