Lenovo’s mobile business continued to improve profitability in its fiscal Q1, despite subdued global demand and a significant year-on-year decline in revenue.

In a statement, the company said: “There is a complexity of macro risks arising from ongoing trade negotiations, import tariff changes implemented by countries and challenges alongside geopolitical uncertainties.”

The bottom line of its Mobile Business Group improved for a fourth consecutive quarter in the three months to end-June, with a pre-tax profit of $5 million reversing a loss of $97 million in the comparable 2018 period. Revenue fell 9 per cent to $1.5 billion.

Lenovo stated a key driver of the profit growth was a “strategic focus in the core markets in Latin and North America”. The former “further enhanced its profitablity”, while demand in the latter was “solid across various channels”, with momentum stronger “than the underlying market”.

However, a move in Europe to focus only on markets Lenovo believes offer the greatest potential for growth resulted in smaller scale and, so, impacted revenue.

Looking to the current quarter, Lenovo said given its most important markets are profitable, an increased contribution from these is likely to further boost MBG’s long-term profitability. It plans to launch up to six new models and continue to strengthen its competitiveness in its target markets.

On a group level, net profit more than doubled to $162 million, with revenue increasing 5 per cent $12.5 billion, its eighth consecutive quarter of growth. The PC and Smart Device Business registered 12 per cent growth to $9.63 billion.