Huawei reported net profit for 2016 up just 0.4 percent to CNY 37.1 billion (USD 5.3 billion). The result was hurt by an increase in tax as well as increased sales and marketing spend to promote its smartphones. Revenues rose 32 percent to CNY 521.6 billion, in line with the company's forecast.
The company's enterprise division showed the strongest growth, with revenue up 47 percent to CNY 40.7 billion. Huawei's growing share in the smartphone market also pushed consumer sales 44 percent higher, to CNY 179.8 billion. Huawei said it shipped 139 million smartphones over the year, up from 108 million reported for 2015. The carrier networks division remained the largest, with revenue up 24 percent to CNY 290.6 billion.
Helped by the expansion of 4G networks, Huawei's sales in China increased 41 percent last year, to CNY 236.5 billion. Its growing smartphone business drove sales in the second-largest region, EMEA, which rose 22.5 percent to CNY 156.5 billion.
Huawei said it saw a "flock of black swans" over the world's political and economic climate in 2016. Its operating margin fell to 9.1 percent from 11.6 percent, while cash flow remained relatively strong, at CNY 49.2 billion versus CNY 52.3 billion in 2015. In 2017 the company said it will focus on creating a more efficient organisation, including strengthening its ability to deliver integrated services to carrier customers.
Huawei also announced that Guo Ping will take over its rotating CEO position from 01 April and serve until 30 September. He replaces Eric Xu.
Guo joined Huawei in 1988 and has served as a R&D project manager, General Manager of Supply Chain, Director of Huawei Executive Office, Chief Legal Officer, President of the Business Process & IT Mgmt Dept, President of the Corporate Development Dept, Chairman and President of Huawei Device and Deputy Chairman of the Board.
