Image Source: Visual China

BEIJING, May 19 (TMTPOST) — Chinese consumer electronics giant Xiaomi Corporation posted a sharp year-over-year net profit decine of over 50% in its 2022 Q1 earnings report, released on Thursday.

Xiaomi’s revenues in Q1 were 73.35 billion yuan, down by 4.6% from the same period of 2021, according to the quarterly report. Meanwhile, the adjusted net profit by non-IFRS measure was 2.86 billion yuan, down 52.9% from 6.069 billion yuan in the first quarter of 2021.

The net profit delcine was attributed to shrinking operating revenues and a loss in investing activities. First, Xiaomi’s smartphone business brought in only 45.8 billion yuan in Q1, registering year-on-year decline of 11.1%. Smartphone shipment also went down by 22.1% to 38.5 million units in Q1. Second, changes in the fair value of investments resulted in a loss of around 3.55 billion yuan.

“In Q1, many offline Xiaomi shops had to shut down because of the pandemic in Shanghai and Hong Kong. Meanwhile, the pandemic also impacted consumption and logistics, which led to the sales decline of Xiaomi’s smartphones,” Wang Xiang, Xiaomi’s partner and the president said at the earnings report meeting, stating it is uncertain whether external factors affected the company’s performance in Q1 would improve in Q2 or not. However, the supply chain has seen noticeable improvements, Xiaomi noted. Xiaomi will maintain close communication with its partners.

In 2022 Q1, Xiaomi’s smartphone sales volume went down by over 20% when compared with the same period last year.

Xiaomi explained in its earnings report that the shortage of key components, Covid-19 resurgence and global economic circumstances have impacted the demand and supply of smartphones in the global smartphone market. Statistics from market research firm Canalys show that the smartphone shipment in the mainland China market went down by 18.2% year-on-year. Xiaomi’s shipment volume slumped to no.5 in the mainland China market. The brand had a market share of 13.9%.

Xiaomi’s share closed at HK$11.08 on Thursday, down by 4.97%.