ZTE books $760m net loss in Q4 due to US sanctions penalty

Credit: Faiz Zaki / Shutterstock.com

HONG KONG (Reuters) – Chinese telecommunications equipment maker ZTE Corp on Thursday reported a net loss of 5.22 billion yuan ($760 million) in fourth-quarter profit, as it booked a $892 million charge to settle a US sanctions case.

The loss for the three months through December compared with a profit of 1.09 billion yuan in the preceding quarter. Excluding all one-off factors, the loss was 21.5 million yuan versus profit of 479 million yuan.

Revenue rose 24.6% to 29.67 billion yuan from three months prior.

ZTE on March 8 agreed to plead guilty and pay the highest penalty among US sanction cases to end an investigation into violations of sanctions against Iran and North Korea. On Thursday, it said the agreement became effective on March 22.

The fine left ZTE posting a 2.36 billion yuan loss for 2016, rather than 3.83 billion yuan in profit, which would have been 19.2% over 2015, ZTE said. Revenue rose 1.04% to 101.2 billion yuan.

The settlement ended the prospect of a proposed trade ban by the US government which could have cut off ZTE’s supply chain, and which has been hanging over the company for a year.

ZTE’s Shenzhen-listed shares have since risen 13.9% to close at 17.4 yuan on Thursday.

(Reporting by Sijia Jiang; Editing by Christopher Cushing)

Be the first to comment

What do you think?

This site uses Akismet to reduce spam. Learn how your comment data is processed.