Huawei reports 19% increase in revenue

Chinese telecoms equipment maker Huawei has reported revenues of $21.9bn for the first six months of the year, up 19% compared with the same period in 2013.

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The company expects to make an operating profit margin of 18.3% for the period as it reaps the rewards of diversifying beyond network equipment into smartphones, wearable technology and other fast-growth sectors.

Cathy Meng, Huawei’s chief financial officer, said the firm "achieved quality and sustainable growth” in its consumer business due to the “increase of brand awareness and smart devices sales worldwide".

Huawei did not give a breakdown of sales but, according to IDC, the firm shipped 13.7 million smartphones in the first three months of this year, making it the world’s third-biggest smartphone maker.

Meng said Huawei’s growth was partly driven by increasing wordwide investment in 4G or long-term evolution (LTE) networks, enabling the firm to “further solidify” its “leadership position” in mobile broadband.

The company also said stronger sales of software and services contributed to steady growth of its business for telecom carriers in the first half, and that it "enjoyed accelerated growth" in the sales of communications products used by corporate clients to build their own private networks.

Huawei’s growth comes in the face of scrutiny by the US, UK and other countries in recent years because of alleged ties to the Chinese government and military.

The allegations have been driven in part by the fact that the company's founder, Ren Zhengfei, was a former member of the People's Liberation Army.

Huawei has repeatedly denied those claims and has emphasised that it is 100%-owned by its employees and founder, reports the BBC.

In March 2014, documents leaked by whistleblower Edward Snowden revealed that US concerns over Huawei equipment had led to the National Security Agency spying on Huawei’s servers.

In response, China demanded an explanation from the US, and Huawei issued a statement that said: “If such espionage has been truly conducted, then it is known that the company is independent and has no unusual ties to any government, and that knowledge should be relayed publicly to put an end to an era of misinformation.”

The strained relationship of the firm with the US has led the company to concentrate on the European market.

In June 2014, Huawei announced it had helped set up 18 Joint Innovation Centres in Europe since its first venture with Vodafone in 2006.

The company also announced the development of a £125m research and development centre in Bristol.