ZTE net profits up by 29.8% in H1 2017

Natalie Bannerman
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ZTE experiences double digit growth across business sectors in the first half of 2017

ZTE has reported double digit growth figures in both its mobile network and smartphone sales for the first half of 2017.

Net profit for the company rose to 29.8% year-on-year (YoY) to $340 million, while consolidated revenue increased by 13.1% YoY to roughly $8.1 billion. This time last year, net income rose just 9% and sales revenues by 4%.

Its carrier network division is the area that drove the most growth, with a 12.6% increase in revenues to $4.9 billion, representing 60% of the entire H1 revenues. ZTE say that this increase is due to: the sale of wireless products in Europe, 4G system products and fixed line & bearer systems in domestic markets. 

Revenues in the consumer group market increased by 24.1% to roughly $2.2 billion YoY. The company say that expansion into new markets has resulted in strong growth in international handset sales, as well as home terminal products in China. Interestingly, revenue in its government and corporate division dropped 18.3% to approximately $500 million.

Domestically, operating revenue grew by 13.8% to $4.8 billion YoY, which accounts for 60% of the overall operating revenue. Globally, revenues in Asia reached $1.2 billion, Europe, the Americas and Oceania brought in $1.8 billion up 25% and African revenue was down 42% at $240 million.   

Company investment in research and development, in the first six month of the year increased by 6.2% to $1 billion, owing to the increase in development in 5G technologies.

Zhang Jianguo, SVP of ZTE, said: “As large-scale 5G deployment had yet to begin, investments continued to be focused on 4G networks, optical-fibre transmission and broadband access products. Certain carriers did start the deployment of pre-5G networks to alleviate the pressure of network data flow created by the video business, as well as to enhance users’ experience.”

Though ZTE is experiencing solid growth across various sectors, it still lags behind its domestic rival Huawei. Huawei saw a reported $42 billion in sales, up 15% YoY. Despite this, Huawei has seen a slowdown in growth since 2016, when sales were up 40% in enterprise and 24% at its carrier networks division.