Double digit growth in sales and a significant one-off gain catapulted PC maker Lenovo's net profits by a stellar 200 percent in 2007/2008.

In the fiscal year that ended March 31, 2008, the PC maker reaped a total of $484 million in net profits compared to the $161 million in the previous fiscal year. This included a $36 million one-off gain from the disposal of its mobile handset business earlier this year.

Excluding the handset contribution, sales for Lenovo climbed a healthy 17 percent to $16 billion. Other than the Americas market, Lenovo managed to record double digit sales growth in Asia Pacific, EMEA (Europe, Middle East & Africa) and the Greater China markets.

The Greater China market saw the strongest growth of 23.3 percent to bring in $6 billion in sales.

In Lenovo's weakest Americas market, sales also grew by 9.4 percent.

Chief Executive Officer William Amelio admits that a "gray cloud" still hangs over the global economy due to a US economic downturn, but he said the impact on the group had been insignificant so far.

"We have not seen any signs that the slowdown in the US market is affecting sales," Amelio told reporters at the company's annual results announcement in Hong Kong yesterday.

He added that the European market continues to grow robustly, providing very good growth opportunities for the group.

He believes emerging markets will be the growth engine in the coming years, possibly representing as much as 50 percent of the growth in PC demand.

"We will be heavily participating in that growth," Amelio said.

Greater China market

On the Greater China front, Lenovo said that the company is well-positioned to increase market share amid growing competition.

"Our penetration in that market is very high. Almost one in every three PCs sold is a Lenovo," Lenovo's chief executive said.

In recent years, other PC makers such as Dell had introduced low-cost budget PCs in the region in an attempt to grab market share. When asked whether Lenovo will toe the Dell line, Amelio said: "We are excited about that category and will participate."

He, however, didn't reveal whether consumers could expect to see a new product this year.

For future growth, Chairman Yang Yuanqing said Lenovo will continue to look towards to acquisitions.

In 2005, the PC maker doled out $1.25 billion for IBM's PC division. However, the company lost the bid to purchase Europe's Packard Bell last year to another PC maker Acer.

Lenovo shares slumped 2.86 percent or HK$0.19 yesterday to close at HK$6.45 before announcing its full year results. The company declared a full year dividend of HK$0.15.

(HK Edition 05/23/2008 page2)