ZTE Corp, one of the leading telecom equipment manufacturer, is confident that the company will turnaround its business this year and is predicting net profit of around 1.2 billion yuan ($178 million) and 1.8 billion yuan in the first half.
This is significant given that the company reported 7.8 billion yuan loss during the same six-month period in 2018. The latest development comes after the business continues to improve after a near-death experience last year.
Last year, in June, ZTE agreed to pay around $1 billion in fines to the US Department of Commerce and put up additional $400 million as surety as part of its settlement for violating US prohibitions against selling American equipment to Iran.
As a part of the same agreement, the company was also required to replace its board and terminate all executives ranked above senior vice-president, as well as anyone involved in the Iran violations.
When the company was banned from doing business in the US and with the companies based in the US, the company had to cease major operating activities for nearly four months. But, it decided to increase its focus in the R&D for 5G technology.
Coming to the finanacials, the company’s net profit was 863 million yuan for the three-month period ending March compared with a 5.4 billion yuan loss in the same period last year. ZTE‘s first-quarter revenue was 22.2 billion yuan, down 19.3 per cent from the first three months of last year.
The Research & Development costs for the first three months of this year amounted to 3.1 billion yuan, accounting for 13.9 percent of revenue, up compared to a ratio of 9.8 percent for the same period last year.
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Earlier this year, during Mobile World Congress in Barcelona, the company said that it had secured six commercial 5G contracts on top of its large supply deals with China Mobile, China Unicom and China Telecom.
(Via)
