BRIEF: ZTE profit plunges 87% in third quarter
Telecoms equipment maker ZTE Corp. (0763.HK; 000063.SZ) reported on Tuesday that its revenue rose 5.11% year-on-year to 28.97 billion yuan ($4.08 billion) in the third quarter. But a sharp rise in its costs caused its net profit to slump 87.84%.
ZTE’s revenue rose 11.63% to 100.52 billion yuan in the first nine months of this year, while its net profit fell 32.69% to 5.32 billion yuan. During the period, its operating costs rose 30.08% to 69.81 billion yuan, far outpacing its revenue growth.
The company’s net cash flow from operating activities dropped 77.9% year-on-year in the first nine month to 1.78 billion yuan, mainly due to higher cash outflows for the purchase of goods and services. Its cash and cash equivalents stood at 26.8 billion yuan at the end of September, down 15% from a year earlier.
ZTE’s shares opened lower in Shenzhen on Wednesday, and closed down 6.96% at 45.95 yuan by the midday break. The Hong Kong Stock Exchange was closed for a public holiday. Both the Shenzhen and Hong Kong stocks remain up about 50% over the past six months.
By Lee Shih Ta
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