Lenovo reported revenue for its fiscal fourth quarter down 9.7 percent year-on-year to USD 10.6 billion. The company was hurt by the shutdown of its main smartphone production site in Wuhan due to the covid-19 pandemic as well as slower sales at its main PC business. Operating profit fell 39 percent to USD 166 million, and the net profit was down 64 percent to USD 43 million.
Lenovo said it still had a strong full year, with revenues down just 1 percent to USD 51 billion, and net profit up 12 percent to USD 665 million. Operating cash flow improved by USD 737 million year-on-year to USD 2.2 billion, and the net debt fell 25 percent to USD 1.2 billion.
The company declared a final dividend of HKD 0.215 per share, down slightly from HKD 0.218 a year ago. A 5-year, 5.875 percent note was issued in May to raise USD 1 billion for debt expiring in June and strengthen the company's liquidity.
The company's PC business reported revenues down 4.4 percent year-on-year in Q4 due to supply constraints in the first two months of 2020, Lenovo said. Pretax profit was still up 15 percent to USD 525 million, helped by the company's focus on margins and the premium segment. PC volume outgrew the market by four points, Lenovo said, and it strengthened its leading market share over the full year to an estimated 24.5 percent.
The Mobile Business Group suffered from the Wuhan shutdown in Q4, but Lenovo said it was still able to produce 6 million phones in the quarter by leveraging its global manufacturing footprint. Annual revenues at the division fell 19 percent to USD 5.2 billion, led by a 47 percent fall in the fourth quarter to USD 824 million.
Lenovo still managed to reduce the full-year pretax loss from mobile to USD 43 million, as profitability throughout the year was offset only by a USD 60 million loss in Q4. The company is hoping margins will strengthen further thanks to an improving product mix after Motorola's recent re-entry in the flagship segment with its Edge device launch.
