CHINESE telecoms equipment maker ZTE sank to a first quarterly loss yesterday due to project delays in a slowing global economy.
ZTE blamed delays in overseas projects, which count for around half of its revenue, for a 2bn yuan (£198m) loss in its third quarter, which compares with a profit of 299.3m yuan for the same period last year. Shares in the company slumped to a one-month low yesterday, falling 16 per cent in Hong Kong.
The firm said it had seen reduced sales in the domestic market, although its international position is seen as most at threat, after a US Senate committee last week branded the company – along with fellow Chinese telecoms giant Huawei – a security risk, urging companies not to do business with them.
ZTE has infrastructure contracts with all the UK’s major telecoms firms, though it does not sell its handsets here, despite being the world’s fourth-largest phone maker by sales.
Fitch yesterday put the company's ratings on negative watch, saying ZTE's results were “significantly worse” than its expectations. The company is due to report final results at the end of the month.