Shenzhen, China Reuters  — 

China’s Huawei Technologies said it was “out of crisis mode” as it posted a small increase in annual revenue Friday, though that was accompanied by a nearly 69% collapse in net profit.

The tech conglomerate also said it was making headway with replacing components affected by US sanctions thanks to the billions it is spending on research.

Its revenue climbed 0.9%, suggesting the company has reached some level of stability after successive rounds of US export controls since 2019 hammered its once mighty smartphone business.

But the major supplier of equipment used in 5G telecommunications networks posted net profit of 35.6 billion yuan ($5.18 billion), down some two-thirds from 2021 when profit was helped by the sale of its Honor mid-range smartphone business. The decline was, however, still severe even when compared with 2020 — a drop of 44%.

Top Huawei executives told reporters how they had been pushed to “a fatal impasse” and “fought their way out” after Washington restricted the company’s supply of chips and chip design tools from US firms.

“2022 is the year that we pulled ourselves out of crisis mode. We’re back to business as normal,” said Chief Financial Officer Meng Wanzhou, daughter of the company’s founder.

The United States has said Huawei represents a security risk, which it denies. Tension with America saw Meng detained for three years in Canada over alleged efforts to cover up attempts by Huawei-linked companies to sell equipment to Iran in breach of US sanctions.

Charges against Meng were dismissed and she returned to China in 2021. Huawei rotates its chairperson every six months and Meng is set to take up the position on Saturday.

R&D spending over the year rose 13.2% to 161.5 billion yuan ($23.50 billion), equivalent to a quarter of company revenue.

Such spending helped Huawei with replacing components in its products that were hit by US trade sanctions, Meng said. Founder Ren Zhengfei told a university in February that more than 13,000 parts had been replaced.

Like Huawei, China’s semiconductor industry has been the target of US export control measures, and the company will provide support to efforts by the industry to become more self-reliant, said Chairman Eric Xu, without providing details.

Revenue for 2022 came in at 642.3 billion yuan ($93.48 billion). While that represented mild growth over 2021, it was still far below the record 891.3 billion yuan ($129.72 billion) logged in 2019 when Huawei was the top Android smartphone vendor globally.