China’s Lenovo said yesterday revenue rose 20% in its past fiscal year, helped by its purchase of Motorola, but net profit growth slowed to just 1%.
The world’s biggest personal computer maker, which is diversifying into the smartphone market, said revenue reached $46.30bn for the year ending March 31. But net profit was up only one% for the period at $829mn, owing to increased operating expenses, which increased almost 40% at $5.57bn, the company said in a filing to the Hong Kong Stock Exchange.
The profit figure was slightly below the net average of $830.2mn expected by 26 analysts polled by Bloomberg News. It represents Lenovo’s slowest net profit growth in five years, Bloomberg said.
The Hong Kong-listed PC maker had seen its net profit rise 29% in the previous financial year, driven by record smartphone sales.
“The rise of new technology and market trends, particularly the social mobile Internet, has posed market opportunities and challenges as consumer behaviour is changing,” the company said in the filing.
The group’s non-PC revenue contribution rose to 28% from 18% in the same period last year.
Revenue from the mobile business including Motorola increased 71% year-on-year to $9.14bn, making up about a fifth of the revenue total.
Smartphone shipments worldwide also grew more than 50% year-on-year to 76mn, “driven by aggressive business expansion in emerging markets outside of China from Lenovo brand products and strong growth of the Motorola brand products”, the company said.
But the group’s PC revenue represented the lion’s share, or more than 70%, of the total revenue—rising 5% year-on-year to $33.35bn.
