Lenovo Deliver Record Pre-Tax Income Despite Coronavirus

Chinese PC manufacturer, Lenovo, has reported an all-time high pre-tax income of US$1.02 billion for FY19/20 (up 19%), despite the economic impact of coronavirus.

Net income lift 12% year-on-year to US$665 million, beating market consensus.

Full-year revenue also exceeded US$50 billion for the second consecutive year despite the effects of COVID19 on global economies.

“From achieving record PTI of US$1.02 billion to reaching near record revenue of US$50.7 billion, I could not be prouder of our strong performance,” said Yang Yuanqing, Lenovo Chairman and CEO.

“While the world continues to face uncertain times, I’m confident Lenovo will leverage its operational excellence and global footprint to continue implementing our intelligent transformation strategy and fully grasp the opportunities our ‘new norm’ provides us.”

Lenovo’s Intelligent Devices Group (IDG) has continued to lead its strong performance, with its PC and Smart Devices sub-division leading the way with revenue of almost US$40 billion (up 3.6% YoY).

Profitability the niche improved, notching record pre-tax income of US$2.3 billion (up a whopping 18% YoY).

Lenovo claims it has continued to extend its leadership in the overall global PC market, with share up more than 1 percentage point (24.5% for the full-year).

The company asserts ‘strong sustainable growth’ is a result of a consistent focus on high-growth segments (e.g. gaming, workstations and Chromebooks). It asserts each of these sub-niches outgrew the market by double-digits in volume.

The company’s Mobile Business Group was “on target for a breakthrough year” until Q4 saw the closure of its primary smartphone factory in Wuhan amidst coronavirus. The business has continued to evolve, mostly recently releasing the revamped iconic Motorla Razr.

Revenue for the division declined with a pre-tax loss of US$43 million – greatly narrowed by US$96 million year-on-year.

For Q4, group revenue slipped 9.7% YoY to US$10.6 billion. PC & Smart devices offered a strong quarter, however, revenue slipped 4.4.% YoY.

PC revenue outgrew the market in all geographies around the word for Q4.

““Amid one of the most significant periods of global change and transformation we have ever seen, Lenovo significantly transformed its business over the past year,” said Mr Yuanqing.