BEIJING—Chinese telecommunications equipment provider Huawei Technologies Co. said Wednesday its 2009 net profit more than doubled because of rising sales and exchange-rate gains.
The results highlight how the Shenzhen-based company and its cross-town rival ZTE Corp. have snatched market share from global telecom equipment giants by charging lower prices for equipment of similar quality.
The privately held company said its net profit for the year rose to 18.27 billion yuan ($2.68 billion) from 7.85 billion yuan in 2008. Revenue rose 19% to 149.06 billion yuan from 125.22 billion yuan.
In its annual report, the company said the surge in net profit was due to cost-control measures that improved operating margins and exchange-rate gains. Excluding the effects of exchange-rate changes, its 2009 net profit would have increased 26.5%.
In 2009, Huawei's global market share rose to 14.2% from 11.5% a year earlier, putting it in second place behind L.M. Ericsson Telephone Co., according to a report by research firm Gartner Inc.
Huawei said it sees its business momentum continuing in 2010 and expects its revenue to grow 20% this year.
"Driven by the development of broadband in 2010, particularly the advancement in mobile broadband, Huawei will continue to maintain a strong and steady momentum across our key business areas," Chief Executive Ren Zhengfei said in the report.
Total revenue growth slowed in 2009 from 33.5% in 2008 due to adverse economic conditions, the company said.
The firm's operating margin rose to 14.1% from 12.9% in 2008 due to cost controls. The company said it sought cost reduction opportunities "in such areas as product development, procurement, manufacturing, delivery and service."
Over the past year, Huawei secured several network deals with European operators, such as Norway's Telenor ASA and Belgian telecommunications provider Belgacom SA.
