Huawei 2011 Annual Report Download - page 24

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19 /
Results of operations
CNY Million 2011 2010 YOY(%)
Revenue 203,929 182,548 11.7%
Gross prot 76,448 80,353 -4.9%
Gross margin 37.5% 44.0% -6.5%
Total operating expenses and other income 57,866 49,677 16.5%
as % of revenue 28.4% 27.2% 1.2%
Operating prot 18,582 30,676 -39.4%
Operating margin 9.1% 16.8% -7.7%
Net nance expense 5,897 2,118 178.4%
Income tax expense 810 3,832 -78.9%
Net prot 11,647 24,716 -52.9%
Sales revenue for 2011 amounted to CNY203,929
million, an increase of 11.7% year-on-year. Net profit
totaled CNY11,647 million, a decrease of 52.9% year-
on-year. The decline in net prot was largely attributable
to an exchange loss of CNY4,876 million in 2011
(compared to CNY1,367 million in 2010) due to the
constant appreciation of the Renminbi. Adjusted for the
effects of exchange rates, net prot declined by 36.6%
year-on-year, which is in line with expectations.
In 2011, Huawei embarked on new business ventures
as the company increased investment in the enterprise
and consumer business segments. In the carrier network
eld, telecom carriers controlled their capital expenditure
in response to the volatile macroeconomic conditions,
which resulted in increased price competition and
declining prots.
Management Discussion and Analysis