Argentine operations seen as strategic to support Positivo's business expansion

- Friday, November 11, 2011

Argentine operations seen as strategic to support Positivo's business expansion

Brazilian computer maker Positivo sees its newly launched Argentine operations as strategic to expanding its business throughout the region, offsetting the eventual downturn in the Brazilian PC market, Positivo CEO Hélio Rotenberg said in a conference call with investors to discuss Q3 results.

"The trend we are observing proves that our entry in that market was right on time," Rotenberg said.

In Positivo's Q3 results - the first time the Argentine operations were included - profits fell 79.3% to 3.2mn reais (US$1.8mn), while revenues were down 21.3% year-on-year to 489mn reais, mostly due to the sale of cheaper PCs. The amount of units sold actually increased 33.9% in the quarter to 698,550.

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According to the executive, the results were mainly driven by large deliveries to the government under a low-cost educational laptops project called Prouca. Rotenberg predicted that the provision of laptops to the government through Prouca will reach 279,000 by year-end.

The CEO also highlighted demand among local retailers, with Positivo's BGH computers being "one of the best sold in the retail market."

TENDER

In Brazil, Positivo is also expecting to enhance its partnership and sign new contracts with the government.

According to Rotenberg, the company has "good expectations" for winning a new public tender called by Brazil's education ministry and providing public schools with 600,000 Positivo YPY tablets.

THAI FLOODS

Despite the upbeat expectations, Positivo's business will most likely suffer from unexpected events in Thailand, which has been hit by devastating floods. The country is responsible for some 40% of global hard disk production, said Rotenberg, who predicted a shortage of the components.

Although other market players are already feeling the pinch, the executive said that the shortage will not immediately impact Positivo's production, as the company has sufficient stock to meet demand until the beginning of 2012.

"However, by then we will be affected, and the prices of the PCs will certainly surge," he said.

According to Positivo, hard disks can account for 5-10% of a PC's final price.