ZTE has updated its financial results for the first quarter of 2018 in order to reflect the impact of a now-overturned ban from dealing with US companies.
The Chinese manufacturer originally published its Q1 results in April – around the same time it was working to overturn the seven-year penalty imposed by the US government.
ZTE revised results
It posted a 39 per cent increase from the 1.2 billion Yuan profit (£134m) it declared a year earlier, but said it was too early to tell what the impact from the ban would be. However it has now revised these figures to show a 5.4 billion Yuan (£603m) loss, a dramatic change.
Losses for the entire of the first half of 2018 are set to be to between 7 and 9 billion Yuan (£782m – £1bn), a far cry from the 2.3 billion Yuan (£257m) profit it recorded in 2017. This will take into the account the $1.4 billion (£1bn) it has had to pay to the US to continue trading with US suppliers.
But ZTE will be happy to be back in business having warned that its future was in jeopardy.
The ban was issued to ZTE for breaching a previous agreement for illegally shipping products to North Korea and Iran. ZTE was obliged to discipline executives involved in the scandal but failed to do so.
As part of a deal brokered by President Donald Trump, ZTE was required to change its management team, dismiss any employee at a senior vice president level or above and pay the US government a $1 billion fine for the ban to be overturned, with a further $400 million held in escrow.
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