Beijing: World’s number one PC manufacturer, Lenovo Group, on Wednesday said annual profit increased 29 per cent on smartphone sales in China and other markets.
The company posted a record profit of $817 million (Dh3 billion) for the year ended March 31, 2014. Revenue, meanwhile, grew 14 per cent to $38.7 billion.
Lenovo, however, reported a 19 per cent year-on-year increase in fourth quarter revenues on strong growth in PCs and mobile devices.
The Chinese firm’s gross profit for the fourth quarter grew to $1.24 billion, an increase of 18 per cent year-on-year.
“This is an exceptional year where everything worked. This is the first time our gross profit has crossed the $1 billion mark,” Aymar de Lencquesaing, president of Lenovo EMEA and senior vice-present of Lenovo Group, told Gulf News.
He said operating profit for the fourth quarter stood at $231 million, up 37 per cent year-on-year, while earnings grew 25 per cent year-over-year to $158 million.
Even though the overall PC shipments declined 4.6 per cent year on year, the Chinese firm’s shipments grew 15 per cent.
According to research firm, International Data Corporation (IDC), global shipments fell to 73.4 million units but shipments in EMEA reached 21.8 million units, a decline of 1.1 per cent as compared to the same period last year.
The Middle East and Africa saw an 8.4 per cent drop in shipments as parts of the region continued to suffer from political unrest.
Lenovo shipped 3.45 million units into EMEA and 12.96 million units globally.
Lenovo PC shipments during the fourth quarter in EMEA grew by 33.3 per cent and is building even stronger momentum across the region. EMEA achieved a 15.8 per cent market share, increasing shipments four share points year-on-year or a nearly 34 point premium to the market.
“Lenovo’s EMEA revenues surpassed its China PC revenue in the quarter for the first time, while in the US, Lenovo surpassed Apple to take the number three position in PC shipments in the fourth quarter,” Lencquesaing said.
The EMEA region had consolidated sales in the fourth quarter of $2.6 billion, a year-on-year improvement of 39 per cent, about 27 per cent of Lenovo’s total worldwide sales. Operating profit margin was healthy at 2.9 per cent, 1.0 point increase year-on-year.
“The region is stabilising and our wide product offer, channel coverage and execution of the ‘attack and protect’ strategy, paid off,” Lencquesaing said.
Lencquesaing said the company has expanded its number ranking by adding 2.1 percentage points of market share to 17.7 per cent for the full year, a gain of five per cent year-on-year. The overall industry declined eight per cent during the same period.
Lenovo sold 64 million devices (PCs and tablets), up nearly 18 per cent year-on-year, outpacing the market by more than 13 percentage points.
The company sold 114 million devices (PCs, Tablets and smartphones), a growth of 37 per cent year-on-year.
“This was the fourth quarter in a row that Lenovo sold more tablets and smartphones than PCs and, at the same time, tablet volumes quadrupled,” he said.
Gross profit for the full year was $5.06 billion, an increase of 14 per cent year-on-year. Gross margin was 13.1 per cent, while operating profit for the full fiscal year was $1.05 billion, a 32 per cent increase year-on-year.
PC business accounts for 51 per cent of the company’s overall sales.
