ZTE has suffered fresh woe just hours after it disclosed details of its settlement with the US government in which it was found guilty of breaching US export control rules in North Korea and Iran from 2010 - 2016. The Chinese vendor released its forecasted loss for 2016 - and it makes grim reading for stakeholders - ZTE have forecast a loss of $343m for 2016.
The latest financial announcement comes hot on the heels of US Justice, Commerce and Treasury department imposing a whopping fine of $892m on ZTE - with a further $300m suspended for seven years. That projected loss reflects the financial provision the company made against the $892m penalty payable as part of the settlement of the US case. It has since emerged that without that financial provision, the Chinese telecommunications colossus would have reported a net profit of CNY3.83 billion in 2016 - which would have represented a 19% increase from results in 2015.
ZTE had issued a warning almost a month ago in relation to the outcome of the US trade sanctions and what impact they would have on its financial results - and they indicated that a settlement would subsequently result in a heavy fine.
For the first quarter of 2017, ZTE expects its net profit to be between CNY1.15 billion and CNY1.25 billion, an increase of between 21 per cent and 31.7 per cent from a year earlier. Revenue is forecast to increase between 10 per cent and 20 per cent from a year earlier, driven by higher revenue in its carrier networks and consumer businesses, the company said in a statement.
CEO Zhao Xianming said that coupled with recent efforts to streamline operations and its leadership around 5G, "ZTE will be well-positioned for positive overall performance. The company anticipates continued growth and business expansion over the next several years as we continue to work with our partners around the world."