BRIEF: ZTE’s profit sags in first quarter

Telecoms equipment maker ZTE Corp. (0763.HK; 000063.SZ) said on Tuesday its revenue rose 7.8% year-on-year to 33 billion yuan ($4.51 billion) in the first quarter, but its net profit declined 10.5% to 2.45 billion yuan.

The company’s operating profit fell 9.4% year-on-year to 2.91 billion yuan during the period. It recorded 117 million yuan in credit impairment losses over that time, mainly due to increased provisions for accounts receivable.

The company noted a significant rise in its long-term borrowings, with non-current liabilities due within one year up 105.1% year-on-year to 11.47 billion yuan as of March. Bond payables also doubled to 2.01 billion yuan due to its issue of new medium-term notes. The company’s cash and cash equivalents at the end of the period stood at 33.4 billion yuan, down from 44.9 billion yuan a year earlier.

ZTE’s Hong Kong-listed shares opened 0.9% higher on Wednesday and closed at HK$22.45 by the midday break, up 3.70%.

By Lee Shih Ta

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