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Australia A $32.7B trade deficit China's Huawei Australian triple digit growth
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2015, Australia A $32.7B trade deficit China's Huawei Australian triple digit growth
Australia export earnings in hole as commodities crater
February 3, 2016 - 2:57 PM
http://www.smh.com.au/business/the-economy/australia-export-earnings-in-hole-as-commodities-crater-20160203-gmkk79
China's Huawei's Australian enterprise business posts triple digit revenue growth.
The iron ore slump has left its mark on Australia's trade balance. Photo: Bloomberg
Australia's trade deficit blew out to a six-month high in December, widening to $3.5 billion as prices for the country's key resource exports tumbled.
The nation's trade position has steadily deteriorated amid the slump of iron ore, its biggest export product. The $32.7 billion trade deficit in 2015 is a new record, according to data going back to 1971.
And the outlook isn't cheery, with the latest plunge in oil prices rattling world markets and prompting the RBA to concede a rate cut might be needed to stem any lasting economic damage.
"Record deficits persist as the collapse in commodity prices is only partly offset by a lower currency and strong export volumes," says UBS economist George Tharenou.
"The trade sector remains under pressure and a further currency depreciation would be helpful."
The speculation has seen the Aussie dollar drop more than a full US cent in two sessions to touch US0.7010¢. Investors are now pricing in a 36 per cent probability of a further cut in interest rates by April, with the bets on a rate cut by July rising to 76 per cent.
So far, the central bank has refused to be panicked by global events, holding rates steady at 2 per cent after its first policy meeting of the year on Tuesday.
If it was to cut rates, it wouldn't be alone: The Bank of Japan has cut rates below zero this year and the European Central Bank flagged a possible expansion of stimulus measures for March.
Commodities dilemma
Australia is especially vulnerable because of its position as a major exporter of resources, whose prices are in free fall.
The RBA's own index of commodity prices sank by a quarter in the year to January, dealing a hammer blow to export earnings, mining profits, wages and tax receipts.
The country's terms of trade - which is what the country gets for exports compared to the cost of imports - looks to have dived around 5 per cent in the fourth quarter to hit a decade-low.
The effect was all-too apparent in trade numbers from the Australian Bureau of Statistics released on Wednesday, which showed the value of goods exported in December was the lowest in almost five years.
With total exports falling 4.7 per cent and imports down only 1.5 per cent, the country's trade deficit widened by nearly a third to $3.5 billion. The figure was far worse than economist consensus forecasts of $2.5 billion.
The one bright spot was service exports, which climbed to record highs as more tourists were lured to Australia because of the cheaper Aussie dollar.
In all, travel exports were over 15 per cent higher in December than a year before, a boost for jobs given the labour-intensive nature of tourism.
Reuters/Bloomberg
Huawei's Australian enterprise business posts triple digit revenue growth
Company reports $US4.5 billion global profit - up 32.7 per cent
01 April, 2015 13:22
Huawei Technologies' giant stand at Cebit featured a vast range of enterprise storage, computing and networking hardware
Huawei's Australian business has posted 18 per cent revenue growth in 2014 on the back of triple digit growth in its enterprise business.
The Australian arm of the company recorded 109 per cent revenue growth in enterprise and a 38 per cent jump in consumer revenue.
In contrast, carrier revenue growth was only 11 per cent.
But the overall Australian growth represents the company's tenth consecutive year of growth.
Globally the company's net profit jumped 32 per cent to $US4.5 billion, while revenue hit $US46.5 billion, an increase of 20.6 per cent from 2013.
The consumer business group led the way posting the strongest revenue increase (32.6 per cent).
The enterprise group followed closely (27.3 per cent) with revenues of $US3 billion.
While the carrier group posted by far the most revenue (31 billion) with almost three times the revenue as the consumer business, but lagged in growth, with 16.4 per cent.
Huawei deputy chairman of the board and rotating chief executive, Ken Hu, said the company had made heavy investment in areas such as cloud computing, Big Data, 5G, SDN and NFV.
"We believe we are well positioned to capture the tremendous business opportunities in this digital transformation era,” he said.
In 2014, Huawei invested $USD6.6 billion into research and development, representing 14.2 per cent of 2014 revenue and a significant increase of 29.4 per cent from 2013.
Huawei chief financial officer, Meng Wanzhou, said, in 2014, the company maintained effective growth and achieved steady financial performance.
"Our cash flow, revenue, and profit all grew over the previous year," he said.
"The net cash amounted to $USD12.6 billion.
"Moreover, our debt and financing structures have continuously improved.
"Huawei's short-term and long-term borrowings totaled $USD4.5 billion as of December 31, 2014, provided primarily by overseas financial institutions at market rates."
Meng said, as 2015 unfolds, ICT technologies, notably broadband, Cloud computing, Big Data, and the Internet of Things (IoT), were becoming driving transformations in many industries.
"Huawei will continue focusing on pipe strategy to create value for our customers," he said.
"Through the dedication of our employees, Huawei strives to become a strategic partner for carriers in their future transformation, a leader in providing enterprise ICT infrastructure, and a top smart device brand preferred and trusted by consumers.”
