Positivo focuses on efficiency as it drops into the red in Q1

Friday, May 13, 2011

Brazilian computer maker Positivo Informática (Bovespa: POSI3) has turned its sights on efficiency in the midst of financial losses and falling revenues.

"At the end of 2010 we began to implement a series of measures to improve our production efficiency, aiming to ensure added profitability," said CFO Ricardo Fernandes Pereira in a conference call to review Q1 results. The strategy focuses on four main areas: streamlining of working capital, reduction of fixed costs and expenses, reduction of manufacturing costs, and reassessment of after-sales structure.

The company saw Q1 revenues drop 20.6% year-on-year to 421mn reais (US$257mn), bringing the company 33.7mn reais in losses versus a net profit of 37.8mn reais in 1Q10.

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"The Brazilian retail market was ranked fourth in the global ranking in 2010 and is expected to reach third place within a few years. Nevertheless, the industry was affected due to the product pricing squeeze... and competition became much fiercer," Pereira noted. "This scenario jeopardized the smaller scale producers and sales have become more concentrated on the major players, especially in the notebook segment."

In the first quarter of the year, Positivo's overall PC volume was down 8.3% to 390,400 units, with the number of desktops sold falling 27.3% to 206,900 and notebooks up 30.2% to 183,500.

In the retail segment, sales inched up 0.1% year-on-year to 299,000 units, while corporate sales surged 64% to 29,400 units. Government sales were down 43.1% to 62,000 units, but Pereira said that this was mostly due to the rescheduling of certain projects, with the delivery of PCs pushed back.

Use this link to see Positivo's full results.