Huawei posts 5.6% rise in 2019 profit

China’s Huawei Technologies, has reported its smallest annual profit increase in three years, hurt by weak overseas sales amid an intensifying U.S. campaign to restrict its global expansion due to security concerns.

According to Reuters, net profit for 2019 came in at 62.7bn yuan ($8.9bn), up 5.6% compared with a 25% jump a year earlier.

Its carrier business, which includes 5G mobile network equipment, saw sales rise just 3.8%.

Accusing Huawei of being a threat to national security, Washington placed the company on its so-called Entity List, which restricts sales of U.S.-made goods and some other items made abroad that contain U.S. technology.

U.S. President Donald Trump’s administration is also preparing further measures that will seek to restrict the supply of chips to the company, sources familiar with the matter told Reuters this month.

The United States alleges the Chinese government could use Huawei equipment to spy, an accusation Huawei has rejected.

“We will need to further adapt to the long-standing restrictions imposed by the Entity List, while also addressing the impact of the ongoing COVID-19 pandemic,” Liang Hua, chairman of the board, said in a report posted on its website.

Overall revenue rose 19% to 858.8bn yuan, helped by a 34% jump in sales for its consumer business unit which includes smartphones.

That was mainly driven by China, where sales surged 36.2% to 506.7bn yuan. In contrast, revenue from the Asia-Pacific region excluding China fell 13.9%, while in Europe and the Middle East sales grew just 0.7%.

Huawei dominated smartphone sales in China, taking a 38.5% share of the market in 2019 compared with 27% a year earlier, according to research firm Canalys.