ZTE is likely to post a net loss of up to 2.9 billion yuan for 2012, say news reports. The company has attributed this loss to non-renewed contracts and delays in various projects.
In a preliminary earnings statement, the company said that its operating income declined 18 per cent year-on-year in the fourth quarter, owing to delays in the extension of system contracts and several international engineering projects.
The projected net loss for the full-year 2012 is between 2.5 billion and 2.9 billion yuan against a net profit of 2.06 billion yuan in 2011. The firm?s gross profit margin in the fourth quarter fell seven percentage points compared to a year earlier, largely due to low-margin contracts in Africa, South America, Asia and within China.
Meanwhile, the vendor expects to return to profitability in the first quarter of this year, partly due to its sale of Shenzhen ZTE NetView Technology, which generated investment income between 820 million and 880 million yuan. The company also plans to control costs, streamline its organisation and focus its efforts in developed markets such as the US, Europe and Japan.
ZTE is likely to report its fourth quarter and full year earnings on March 28, 2013.
