Date
12 December 2018
ZTE says its production has returned to normal following the lifting of US sanctions, and that it expects to return to profit in the current quarter. Photo: Reuters
ZTE says its production has returned to normal following the lifting of US sanctions, and that it expects to return to profit in the current quarter. Photo: Reuters

ZTE posts US$1.1 bln first-half loss on US supplier ban

ZTE Corp reported a net loss of 7.8 billion yuan (US$1.1 billion) for the first half of 2018, taking a hit from a US supplier ban that forced the Shenzhen-based firm to halt operations for three months.

Unveiling the results Thursday, China’s second-biggest telecom equipment maker said it expects to return to profit in the third quarter as operations have returned to normal following a lifting of the US sanctions. 

The company forecast a net profit of between 24.2 million yuan and 1.0 billion yuan for the three months to September, Reuters reports, citing a filing to the Shenzhen stock exchange.

ZTE was crippled in April when the United States imposed a seven-year ban, saying ZTE broke an agreement to discipline executives who conspired to evade US sanctions on Iran and North Korea.

The ban, which became a source of friction in Sino-US trade talks, was lifted in July after ZTE paid US$1.4 billion in penalties and agreed to radical management change.

The company’s new executives told shareholders this week that production has returned to normal and that orders are in line with those of July and August last year.

Due to the first-half loss, ZTE still expects to be in the red for the nine months to September, with the loss for the period projected in the range of 6.8 billion to 7.8 billion yuan.

Operating revenue in the first half fell 27 percent to 39 billion yuan.

ZTE and its bigger rival Huawei have come under pressure in the recent past due to suspicions among Western powers about Chinese telecoms equipment makers, amid the firms’ perceived links to the Chinese government.

The companies have dismissed such fears as baseless.

– Contact us at [email protected]

CG/RC

EJI Weekly Newsletter

Please click here to unsubscribe