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Positivo sees public sector deliveries resuming in 2016

Bnamericas Published: Tuesday, May 17, 2016

Positivo Informática, Brazil's biggest electronics brand, expects deliveries to the government sector to resume throughout the year despite the complicated political backdrop in its home country.

The company has a portfolio of deliveries in Brazil of some 200,000 pieces of equipment, with high average unitary prices, of which only 35,000 were delivered in 1Q16, Positivo said in a Q1 earnings statement.

Sales should resume in Q2 after government and companies postponed expenditures as they awaited the outcome of the political and economic scenario.

Overall, Positivo said it has 500,000 PCs and tablets ready for delivery in Brazil, Argentina, Uruguay and Rwanda under the Positivo and Positivo BGH brands. The company says FX risks on those sales are covered.

In Q1, sales in Argentina and Rwanda, under the JV with BGH, increased 265.6%, driven by the delivery of large projects for educational laptops, but in Brazil, 50.7% fewer units were delivered.

Thanks to the offshore deliveries, volumes in the government vertical outstripped those in the retail and corporate areas during Q1, although there was a 36.3% dip in revenue due to the lower prices of the corporate device sold.

Positivo said it is at an advanced stage of talks about large new contracts for the supply of PCs and tablets for students in other African countries.

The group has not provided details of the projects that will receive the devices nor the expected revenues generated.

RESULTS

Despite the positive prospects, Positivo fell in the red in Q1 and reported a net loss of 10.4mn reais (US$2.97mn), while net revenues fell 16.9% to 376mn reais. There were declines in the majority of business lines and product types.

The notable exception was mobile phones: smartphones sales rose 150%, while sales of feature phones grew nearly 64%. Mobile phones now account for 20% of Positivo's revenues.

Net debt was down slightly to 245mn reais from 271mn reais at end-1Q15. However, the net debt/adjusted Ebitda ratio rose to 2.7x from 2.1x in 1Q15.

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