Dogged by security concerns ZTE posts its worst ever loss of £877m

ZTE, the Chinese telecoms giant that almost collapsed when it found itself at the centre of an international cybersecurity storm, suffered its worst ever financial loss in the first half of the year.

The company reported a loss of 7.8bn yuan (£877m) for the first half of the year, a period in which it has faced growing suspicion this year over its links to the Chinese government. Revenues fell 27pc to 39.4bn yuan

ZTE, which makes telecoms equipment and smartphones, counts the Chinese state as its largest shareholder. It has been hit with bans or penalties in several countries in recent months amid rising global security tensions.

US sanctions on the company threatened to put it out of business and the company halted operations for several months after it was banned from selling components to American companies for seven years.

ZTE had been accused of skirting sanctions on North Korea and Iran but was offered a reprieve when Donald Trump intervened amid wider trade talks between the US and China.

It has since agreed to pay billions of dollars in fines and overhaul its board.

In Britain, GCHQ’S cyber defence arm has dubbed the company a national security risk, and Australia has banned the company from providing equipment for its 5G network.

The company’s shares were suspended in April and have almost halved this year.

It faced further trouble yesterday when Japan became the latest country to threaten curbs on the company. Officials in Tokyo are reportedly studying whether tighter restrictions are needed on importing telecoms equipment from China ahead of the 2020 Olympics.

ZTE said it was recovering from the scandal and would be profitable in the third quarter of the year, with production returning to normal levels in recent weeks.