Net profit of Chinese technology company Xiaomi fell 87.2% in 2022

The Chinese technology Xiaomi obtained in 2022 a net profit of 2,474 million yuan (359.7 million dollars), which represents a decrease of 87.21% compared to the figure of the previous year.

In the income statement that it sent today to the Hong Kong Stock Exchange -where it is listed-, the company assures that 2022 was a year “full of challenges” in which, according to data from the consultancy Canalys, sales of smartphones (‘ smartphones’) worldwide were at their lowest in the last nine years after falling 11.7% year-on-year.

The technology company’s turnover fell by 14.7% year-on-year to 280.044 million yuan (40.712 million dollars).

Specifically, Xiaomi sold 150.5 million ‘smartphones’ in 2022, which represents a drop of 20.9% compared to the figure for the previous year, “mainly due to weak demand in the market (…), affected by macroeconomic headwinds and geopolitical disruptions.

This represented a 19.9% ​​drop in billing derived from that line of business, which continues to be the one that reports the most income, with 59.7% of the total.

Despite this, Xiaomi highlighted that it maintained its third position in the list of the world’s largest smartphone sellers, with 12.8% of the market share.

Its second largest division, that of “internet of things and lifestyle products” -which includes smart TVs, laptops or household appliances- experienced a revenue decline of 6.1% year-on-year, although the company wanted to highlight the good performance of its tablet sales in China (+160%).

The last of the three major business lines into which Xiaomi divides its operations, internet services, was the only one that experienced a slight increase in revenue (+0.4%).

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Net profit of Chinese technology company Xiaomi fell 87.2% in 2022

In general, sales in China, which represent slightly more than half (50.8%) of the company’s revenues, fell by 13.64%, while those registered in international markets -among which Spain and Latin America occupy prominent positions- they did so in 15.77%.

Xiaomi assured that, despite the aforementioned “fluctuations”, its global presence has helped it to “effectively isolate businesses from the risks of specific markets”.

In its billing analysis for the fourth quarter, the firm specifically alludes to lower demand in China due to outbreaks of the pandemic – which the Government faced with harsh restrictions and confinements within the framework of its ‘zero covid’ policy – and initiatives to liquidate their stocks in international markets.

Looking ahead to 2023, Xiaomi assures that it will bet on a “dual emphasis on scale and profitability”, putting the latter factor at the same level of importance after years in which it prioritized the expansion of its operations.

Regarding its anticipated entry into the smart electric vehicle market, the technology company sees itself in a good position to achieve its goal of starting to mass-produce them in the first half of 2024, and noted that in 2022 it will invest 3.1 billion yuan (450.7 million dollars) in this new line of business, for which it has 2,300 employees dedicated to research and development tasks.

With information from EFE.

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