Chinese consumer electronics manufacturer Xiaomi saw its net profit fall by 20.3 per cent and its revenue by 6.1 per cent in the second quarter.
According to the company’s press release, net profit for April–June stood at 9.46 billion yuan ($1.4 billion), compared with 11.87 billion yuan for the same period last year. Revenue fell to 108.92 billion yuan from 115.96 billion yuan.
Profit excluding one-off items fell by 42.6 per cent to 6.22 billion yuan.
Analysts had forecast, on average, that the company’s revenue would be 112.2 billion yuan and adjusted profit 6.6 billion yuan, according to LSEG.
“Significant increases in the cost of key components, particularly memory chips, coupled with intensifying competition in the sector, continue to pose challenges for our business,” Xiaomi said in a statement.
Revenue in the smartphones, Internet of Things (IoT) and consumer electronics segment totalled 84.03 billion yuan (down 11.3 per cent), whilst revenue in the electric vehicles, artificial intelligence and other new initiatives segment stood at 24.9 billion yuan (up 17.1 per cent).
Last quarter, the company shipped 31.2 million smartphones, compared with 42.4 million a year earlier. According to Omdia, Xiaomi ranked among the world’s top three smartphone vendors for the 24th consecutive quarter.
Sales of electric vehicles in April–June rose by 28.2 per cent to 104,199 units.
The company increased its investment in R&D by 18.9 per cent to 9.2 billion yuan.
Xiaomi’s share price rose by 1.2% at the close of trading in Hong Kong on Tuesday. The financial results were published after the market closed. Since the start of this year, the company’s market capitalisation has fallen by a third, whilst the Hang Seng Index lost 0.6 per cent.