Huawei Technologies' first half profits drop 22%

Chinese telecoms giant Huawei Technologies saw sales increase 5.1% to CNY102.7bn (£10.4bn) over the first half of 2011, while profits fells 22% to CNY8.79bn (£0.9bn) compared to the same period last year.

Meng Wanzhou, chief financial officer of Huawei said: “We are relatively optimistic about our operating performance and profitability for the remainder of 2012.”

Wanzhou said: “In 2012, Huawei outlined our new pipe strategy and we will focus even further on this approach to ensure more effective growth and greater efficiency to drive continued improvements in operating performance.”

As a private company, Huawei is not obliged to release its results. This is just the second time the company has disclosed its results in a half-yearly update as part of a move toward greater transparency. Huawei is expected to publish a more detailed report at the end of the year.

Huawei did not provide a breakdown of its European and UK markets. 

Mark Lewis, partner at legal outsourcing firm Berwin Leighton Paisner, said it was surprising that a company looking to expand internationally did not provide more updates about its overseas market.

According to a Forrester report, Huawei needs to grow its enterprise business in Europe in the long term if it is to continue its growth trajectory. 

“Huawei has laid a strong foundation for the first year of its enterprise business launch and is investing heavily in pulling together competitive solutions,” said the Forrester report. 

“The firm will continue to invest in the enterprise market — even if it must operate at a loss for several years — simply because it must.”  

Huawei currently has around 800 employees in the UK, with plans to increase the workforce to 1,000.