ZTE reports 12.4 percent decrease in profit in H1 2011

ZTE, Chinese telecom equipment vendor, reported a 12.4 decrease in profits in the first half of 2011.

The profit has fallen to  RMB 768.5 million ($119.7 million). The decrease in profit is due to its market share expansion strategy, a change in product structure and pending software VAT refund subsidies.

ZTE’s operating revenue increased 21.6 per cent to RMB 37.35 billion, with revenues from international markets increasing by 36.4 per cent year on year to RMB 20.81 billion, accounting for 55.7 percent of overall operating revenue.

It increased revenues from wireless infrastructure contracts during the six months to the end of June this year, and claimed a leading position in fixed product areas including PSTN, FTTX, MASN and DSLAM.

ZTE shipped 60 million handsets, 35 million of which were smartphones, during the period, an increase of 400 percent year on year. Operating revenue for the handset business grew to 30 percent of overall operating revenue, up from 25.4 percent for the same period in 2010. However, gross profit margin for the handset unit declined from 22.7 percent to 19.6 percent.

ZTE is ranked first among all fixed-line terminal suppliers in terms of growth rate, according to leading market research firm Infonetics Research. ZTE posted a 125.3 percent year-on-year increase and 11.2 percent quarter-on-quarter growth of DSL CPE revenue.

In addition, ZTE’s annual DSL terminal shipments for the period from Q2 2010 to Q1 2011 rose 16.9 percent compared with the previous rolling four quarters, and 4.4 percent quarter-on-quarter, which again puts ZTE on top for growth among the largest global vendors.

By Telecomlead.com Team
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