Chinese telecoms equipment maker ZTE said that revenue for the first three quarters of 2012 increased from the year-earlier period. It expects to record net loss attributable to shareholders of between RMB 1.65 billion and RMB 1.75 billion for the nine months, a reversal of between 254.42 percent and 263.78 percent compared to the year-earlier period. The loss is mainly attributed to four factors: the current global economic and industry trend, the recognition of low-margin contracts in the third quarter, a delay in some projects of overseas clients, and a change in the procurement mode of domestic operators. In response to these operating results, the top management has agreed to cut their own compensation collectively.
The company now plans to raise its level of responsiveness to the internal and external environment in order to adjust its strategy in a timely fashion. It will put profit at the centre of its focus, and commit to increasing the profitability of contracts and reducing losses on some unprofitable businesses. It plans to optimise operational efficiency by reducing selling costs and R&D expenses, closing down offices that record losses for a long time with limited prospect of turnaround. It will also consolidate products that offer little development potential, exercise headcount control and conduct organisational change. It also plans to conduct a review of its strategy on products, and on operations in different regions. The company will allocate more resources to its terminals business in North America and Europe, while proactively pursuing opportunities in the mobile and wired broadband segments in emerging markets including China and Asia Pacific.
