Brazil's largest PC maker Positivo Informática (Bovespa: POSI3) saw a 6.4% decrease in net profit to 54.9mn reais (US$25.9mn) in this year's third quarter, the company said in its definitive 3Q08 earnings release.
The result was impacted by the Brazilian currency devaluation.
Positivo saw net revenues grow 36.1% in net revenue to 526mn reais in the third quarter over the 386mn reais billed in the same period last year.
Third quarter revenue breaks down into 513mn reais from hardware sales, of which 67.5% corresponded to desktop sales and 32.5% laptops, while the remaining 13mn reais was from the sale of educational technology.
The company's Ebitda was up 4.6% to 65.5mn in the third quarter, while the Ebitda margin dropped 3.8 percentage points to 12.5%.
In total, Positivo sold 437,292 PCs in the quarter, up 41.5% compared to 3Q07. Laptop sales jumped 170% to 142,181 units, while desktop sales grew 15% to 295,111 units.
Positivo Informática invested 14.5mn reais in 3Q08, up 127% compared to 3Q07. Investments mainly went to R&D in educational technology and in operations in the industrial plants based in the cities of Curitiba, Ilhéus, and Manaus.
The average price per PC in US dollars increased 9.4% to US$795.80 from US$727.60 in 3Q07 due to the increasing importance of laptops in the mix, as well as a higher proportion of sales closed with the government and corporate sectors, which tend to acquire more expensive PCs than general public. According to the company, on average 90% of the production costs per PC are dollar-denominated.
"Even with the crisis, we had good sales in October. However, the average price per PC will increase in this year's fourth quarter. In order to compensate for the high price of the US dollar compared to the Brazilian real, the company will maintain the average prices for PCs but will adjust their configuration and diminish the screen size, for example, to offer computers at the same price ranges," Positivo Informática president Hélio Rotenberg said in a conference call.
According to Rotenberg, retailers have their own strategies on how to keep customers buying, such as extending the number of installments a customer can pay for a PC in order to maintain the average price per installment.
"We are still working with the price of components bought at 1.60 reais per US$1 but soon we will work with components bought at 2.15 reais per US$1, so we will need to pass this difference on to retailers. Even though they will not like to increase prices, they will need to accept it because all manufacturers are going through the same problem," said Positivo Informática financial VP and investors relations director Ariel Szwarc. The price increase will be introduced gradually, he added.
The retail sector was the main vertical industry to which PCs were sold in the third quarter, with 303,036 units, followed by government with 110,726 units and the corporate segment, with 23,530 units.
Positivo expects to deliver another 50,700 PCs to federal government educational programs in 4Q08.
The manufacturer also expects the education ministry to launch a tender in 4Q08 for 300,000 PCs for public schools in 2009. Also, the Brazilian census bureau IBGE has already announced a tender for 150,000 ultraportable laptops for its 2010 census.
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