Chinese vendor ZTE, just hours after announcing a near $1 billion settlement with the US government, issued its guidance for 2016, with a projected net loss of CNY2.36 billion ($343 million) compared with a net profit of CNY3.2 billion in 2015.
The loss reflects the financial provision the company made against the $892 million penalty payable as part of the settlement of the US case. Without the provision, ZTE said it would have reported a net profit of CNY3.83 billion in 2016, which would have been a 19 per cent year-on-year increase from 2015.
Its revenue last year was expected to increase by 1 per cent to CNY101.2 billion.
The settlement was struck with the US Justice, Commerce and Treasury departments, and is now pending approval from a US district court. The US slapped trade sanctions on the Chinese equipment maker in March 2016 following allegations it breached the country’s export rules covering Iran. The government said it would ban US exports to ZTE, but suspended the ban several times.
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