March 17, 2016 / 12:23 AM / in 3 years

China's ZTE delays annual results after U.S. restrictions

Visitors check out products at the ZTE stand at the Mobile World Congress in Barcelona, February 24, 2014. REUTERS/Albert Gea

SHANGHAI (Reuters) - China’s ZTE Corp (0763.HK)000063.SZ said it will delay the publication of its annual results because it needs to assess the impact of tough U.S. export restrictions imposed on the telecom equipment maker last week.

The U.S. Commerce Department has imposed restrictions on U.S. suppliers providing crucial components to ZTE for alleged Iran sanctions violations, a move likely to disrupt its global supply chain.

ZTE was unable to finalize its annual results “pending a thorough self-assessment on the potential impacts of the restriction measures on the business and operation of the group,” the firm said in a filing to the Hong Kong stock exchange on Thursday.

ZTE’s board meeting would also be postponed, while its Hong Kong-listed shares would continue to be suspended, it added. The shares last closed at HK$14.16, prior to a trading suspension on March 7.

Goldman Sachs last week suspended its coverage on ZTE, saying there was not enough information to determine an investment rating, price target and earnings estimates for the company.

Reuters reported on Wednesday that ZTE would appeal against the U.S. export restrictions after the firm’s costly lobbying effort failed to allay concerns about its business.

A spokesman for the Chinese Commerce Ministry said ZTE was communicating with the U.S. Commerce Department regarding the export restrictions.

In January, ZTE said preliminary net profit for 2015 rose 43.5 percent to 3.8 billion yuan ($583 million). The company said it aimed to double its annual revenue by 2020.

Hong Kong-listed shares of ZTE have dropped 20 percent so far this year.

Reporting by Adam Jourdan, additional reporting by Beijing Monitoring Desk, Editing by Anne Marie Roantree and Stephen Coates

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