New Delhi: Vivo Mobiles, India’s third-largest smartphone brand, posted net profit for the first time after four years, helped by a sharp drop in advertising and promotion expenditures in FY21.
India’s Chinese smartphone maker posted a net profit of Rs. 552 crore on operating income of Rs. 24,725 crore in FY21, according to its financial statement submitted to the Ministry of Corporate Affairs.
In ex-ministerial filings, Vivo reported losses of Rs 348 crore in FY 2020, Rs 19 crore in FY 2019, Rs 124.2 crore in FY 2018 and Rs 114 crore in FY 2017.
Xiaomi, the smartphone market leader, posted a profit of Rs 275 crore in FY21 while Samsung, in second place, posted a net profit of Rs 4,040 crore. Oppo, which ranks fifth, posted a loss of Rs. 2,203 crore over the same period.
Vivo is back in the black after it slashed its advertising and promotional expenditures in FY21 by a whopping 64.4% YoY to Rs 403 crore. However, its operating income decreased by 1.3% year-on-year.
The drop in advertising expenditures came as a result of Vivo withdrawing from sponsorship of the Indian Premier League title, with fantasy sports app Dream11 dominating it in 2020, according to market trackers. The company has been sponsoring the high-profile domestic cricket tournament since 2016.
Vivo is fighting government agencies over financial irregularities in 2022, along with other Chinese smartphone companies. Its premises have been searched by the Enforcement Department (ED) due to money laundering charges amounting to Rs 1,200 crore. This, while the Director of Revenue Intelligence also issued a notice of Rs 2,217 crore for evasion of tariffs.
Vivo was granted relief from the Delhi High Court in August over the freezing of its accounts by the ED after it was required to provide a bank guarantee of Rs 950 crore, and maintain a balance of Rs 251 crore.