Driven by a 26% growth in its domestic Chinese market, ZTE posted 1H2012 revenue of RMB 42.64 billion for the period, an increase of 15.2% year-on-year.
Pre-tax profit in the period was RMB 656 million, a decrease of 48.5% year-on-year. Basic earnings per share for the period were RMB 0.07. The decline in net profits was attributed to reduced investment income, exchange losses, postponement of network contract tenders of certain domestic carriers and lower gross profit margin.
Some highlights:
- During the reporting period, ZTE reported operating revenue of RMB 20.89 billion from the domestic market, accounting for 49% of overall operating revenue and representing year-on-year growth of 26.4%.
- From the overseas market, ZTE reported operating revenue of RMB 21.76 billion during the period, accounting for 51% of its overall operating revenue and representing year-on-year growth of 6.2%.
- For carrier network products, ZTE reported revenue of RMB 21.28 billion, representing year-on-year growth of 3.9%.
- The slight increase in operating revenue from the Group’s carriers’ networks segment for the first six months of 2012 reflected mainly growth in revenue derived from wireless products in the domestic and international markets and from optical communications systems and data products in the domestic market, offset by the decline in revenue derived from wireline switch and access products in the domestic and international markets and from optical communications systems and data products in the international market, resulting in a relatively small margin of growth.
- Terminal products revenue was RMB 14.25 billion, representing year-on-year growth of 27.1%.
- Telecommunication software systems, services and other product revenue was RMB 7.11 billion, representing year-on-year growth of 33.8%.
- ZTE also saw a 70% increase in sales in its government and enterprise business for the period ending June 30, compared with the same period a year earlier. This was partially due to the company’s launch of data center products and a series of smart solutions in the government and business arenas, including Smart Mine, Smart City and the Smart Traffic System.