ZTE First Quarter Results show Cash Flow Improvement

ZTE Corporation (ZTE) has reported that it has received a 35.9% increase in net profit in the first quarter, as the company’s operational review continued to deliver improvements in cash flow and profitability. The operating cash flow of first-quarter results showed significant improvement as compared to the last year.
 
The net profit attributable to shareholders of the parent company went up to RMB205 million and basic earnings per share increased to RMB0.06 in the first quarter. For the last two consecutive quarters, the gross profit margin has increased, whereas the revenue dropped 2.8% to RMB18.09 billion. The company achieved combined savings of RMB350 million in selling, administration and research costs in the first quarter as against last year’s results.
 
With regard to other improvements in the first quarter as well as in  the second half of 2012, the company  has enforced measures to focus resources on key products and markets, improved cash flow management, reduced costs  and also targeted on higher-margin contracts in order to achieve an improved cash flow structure. The results of the operational review, combined with the disposal gain, allowed the company to overcome the negative effects from currency fluctuation and asset write-downs to record higher net profit.