ZTE to post 9-month net profit of RMB 500 million – RMB 750 million;
first-half profit increased 26.6% to RMB 310 million
SHENZHEN, China--(BUSINESS WIRE)--
ZTE Corporation (“ZTE”) (H share stock code: 0763.HK / A share stock
code: 000063.SZ), a publicly-listed global provider of
telecommunications equipment, network solutions and mobile devices,
forecast the company will post net profit of between RMB 500 million and
RMB 750 million in the first nine months of 2013, rebounding from a loss
in the same period a year earlier.
The turnaround in ZTE’s financial performance this year was achieved on
the back of improved gross profit margins and stringent cost controls.
In ZTE’s first-half results announcement released today, the company
reported net profit attributable to shareholders of the listed company
of RMB 310 million, a year-on-year increase of 26.6%. Basic earnings per
share amounted to RMB 0.09. Revenue decreased 11.9% to RMB 37.58 billion.
By focusing on profitability, ZTE’s gross profit margins improved in the
first half. The company also benefited from greater cost efficiency,
with a significant year-on-year drop in selling, administrative and
research costs, in addition to the disposal gain from the sale of a
subsidiary. In the first half of 2013, telecommunications operators
globally adopted greater prudence in their infrastructure investments.
ZTE focused on developing its business in major markets and deepening
partnerships with mainstream global carriers to ensure the company’s
products and services meet our customers’ needs. Revenue fell because of
a drop in sales of GSM and UMTS products in China, and declining demand
for 2G devices.
1) Results by Geography
The domestic market
ZTE reported operating revenue of RMB 18.821 billion from the domestic
market in the first half, accounting for 50.1% of overall operating
revenue. The company leveraged opportunities presented by the
construction of 4G networks and infrastructure related to the Broadband
China strategy, working closely with operators to deliver superior
solutions that fulfill their needs. At the same time, ZTE focused on
achieving improved profit margins in network contracts to ensure the
company’s sustainable development.
The international market
ZTE reported operating revenue of RMB 18.755 billion from the
international market, accounting for 49.9% of overall operating revenue.
The company continued to focus on business operations in major markets
and deepen relationships with mainstream global carriers, strengthening
the development of strategic new products and solutions and frontiers
for enhanced business competitiveness.
2) By product categories
ZTE reported operating revenue of RMB 19.050 billion for carriers’
networks, RMB 12.461 billion for terminals, and RMB 6.065 billion for
telecommunications software systems, services and other products.