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Ammon News - China’s Huawei Technologies saw revenue fall 16.5% in the first quarter compared to a year earlier, hurt by a dip in sales after selling its budget smartphone unit Honor in November, Reuters reported.

Revenues were 152.2 billion yuan ($23.46 billion) in the first quarter, it said on Wednesday.

But net profit margin rose 3.8 percentage points compared to a year earlier to 11.1%, it said, as the company cut costs and received a boost from $600 million in royalty payments, according to Reuters.

“2021 will be a challenging year for us, but it’s also the year that our future development strategy will begin to take shape,” Huawei’s rotating chairman Eric Xu said in the statement.

Huawei was put on an export blacklist by former U.S. President Donald Trump in 2019 and barred from accessing critical technology of U.S. origin, affecting its ability to design its own chips and source components from outside vendors.

The ban put Huawei’s once lucrative handset business under immense pressure, prompting the sale of its Honor budget smartphone unit to a group of agents and dealers in November.

The loss of sales from Honor contributed to the drop in quarterly revenue, the company said.

In March, Huawei had posted a 3.2% rise in profits in 2020, largely driven by its home market.

But its business declined elsewhere in 2020, with revenues down 12.2% to 180.8 billion yuan in Europe, the Middle East and Africa, down 8.7% to 64.4 billion yuan in the rest of Asia, and down 24.5% to 39.6 billion yuan from the Americas.

The company is investing heavily in businesses that are less reliant on U.S. chip technology such as autonomous driving technology and cloud computing, Xu said this month.