THE Xiaomi is one of the world’s leading mobile phone manufacturers. But that’s not why it is immune to negative results: the Chinese suffered a 59% drop in net profit in the third quarter of 2022, but remained the third largest smartphone brand in Latin America. That’s what the company’s financial statement revealed this Wednesday (23).
The results give a status for the three month period ending September 30th.
According to the company, revenue for the year was 70.5 million yuan (about R$52.5 million in direct conversion). The record represents a drop of 10% compared to the same period last year.
Net income followed the same direction. With a drop of 59% in the annual comparison, the manufacturer recorded a result of 2.1 billion yuan (R$ 1.5 billion).
However, as noted by GSMArenathis is not necessarily bad news: on the contrary, Xiaomi had the reduction precisely for investing more in some areas of the company.
This is the case of the electric car project. In its balance sheet, the Chinese brand reported that it allocated 829 million yuan (R$ 619.2 million) to the business, which stood to receive US$ 10 billion in investment over ten years🇧🇷
The company’s first car is expected to start production in 2024🇧🇷
Part of the funds were allocated to the research and development sectors. In this area, the manufacturer spent 4.1 billion yuan (R$ 3 billion), an increase of 25.7% year on year.
No wonder, in September 2022, the group represented about 48% of the total number of employees.
The cell phone division is one of Xiaomi’s most profitable. And it’s no wonder: it’s a lucrative market, which represented the sale of 301 million mobile phones globally in the third quarter of 2022. survey of Counterpoint Research🇧🇷
The Chinese brand did not do badly. In the period, the company sold 40.5 million units and ranked third, behind only Apple and Samsung.
Even so, this was not the best moment in the sector. The consultancy pointed out, in October, that the 3rd quarter had the worst drop since 2014. At the time, analyst Harmeet Singh Walia explained that, among other reasons, the decline was caused by tensions between China and the United States and the weakening of currencies national.
This whole pessimistic scenario ended up impacting the manufacturer. According to Xiaomi’s balance sheet, there was a drop of 7.8% in the annual comparison, although the company grew 2.8% compared to the previous quarter.
The setback, however, reduced revenue by 11.1% when taking the third quarter of 2021 into account.
Xiaomi is the third largest in Latin America
The company, on the other hand, maintained its consolidated position. To get an idea, Xiaomi is the second most important cell phone manufacturer in Europe and the third largest in Latin America. The brand also has relevance in the Brazilian market, especially after LG stopped selling smartphones🇧🇷
It is worth remembering that, in 2020, the company informed that it was in the Brazilian top 5🇧🇷
The balance also gave details about MIUI. The interface, in Q3, had approximately 564 million users, a 16% year-on-year increase.
Interestingly, China is not the biggest market for software. Xiaomi reported that the Chinese represent one in four users of the interface: 141 million.