Chinese smartphone maker Xiaomi Corp (1810.HK) reported a fall in first-quarter revenue as COVID-19 controls and lockdowns hit demand in China while broader economic headwinds including Russia's invasion of Ukraine added to costs.
Revenue in the quarter ending March 31 dropped to 73.35 billion yuan ($10.85 billion) from 76.88 billion a year earlier and fell short of the 74.3 billion expected by analysts, Refinitiv data showed.
"In the first quarter the whole industry faced challenges, first with a shortage of components, then the resurgence of COVID-19, and also an impact in the macroeconomic environment," the company's president Wang Xiang said on Thursday.
"These challenges have dealt a heavy blow to our business."
He noted that COVID outbreaks first in Hong Kong and then in Shanghai had disrupted shipments, with the months-long Shanghai lockdown and the conflict in Ukraine likely to weigh on revenues in the second quarter.
Smartphone shipments fell 22.1% to 38.5 million units in the quarter, Xiaomi said in a statement on Thursday. Loss for the period came to 530.7 million yuan, down from a profit of 7.79 billion yuan a year earlier.
Xiaomi, which generates the vast majority of its revenue from selling mobile handsets, said smartphone revenue fell to 45.8 billion yuan in the quarter.
The Chinese company and rival phonemakers Vivo and Oppo have told suppliers to cut back orders for the next few quarters by more than 20% due to the lockdowns and disrupted supply chains, Nikkei reported on Wednesday.
Xiaomi has been under investigation in India since February in relation to alleged illegal transfers of funds abroad, with authorities seizing $725 million in the company's India bank accounts earlier this month.
The company has denied any wrongdoing, saying its royalty payments were legitimate.
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