Brazilian computer giant Positivo sees Q1 profits soar

Foreign exchange hedging mechanisms helped the company - but sales targets for 2015 were revised

Brazilian computer manufacturing giant Positivo has seen a 911.6 percent jump in profits for the first quarter with the aid of foreign exchange hedging mechanisms to protect its financial exposure.

The hedging strategy coupled with a push to reduce operational spending meant the company's net income reached R$ 11.5m ($3.81m) within the first three months of the year.

But financial maneuvering couldn't completely balance the books as the average price increase of 20.9 percent for desktops, notebooks and tablets introduced to reflect the dollar hike was not enough to make up for the 24.6 percent sales decrease seen in the start of 2015.

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"The Brazilian PC and tablet market presented modest volumes in the opening months of 2015. The economic slowdown caused by the decline in consumer confidence reduced inventory turnover in the retail market, especially in January and February," the company said in a statement.

The exception was the mobile phone segment, where sales increased by 14.7 percent, however an interesting pattern could be observed in the manufacturer's results as smartphones sales dropped 37.1 percent and feature phones increased by a whopping 141.4 percent - that's despite the bullish predictions for the smartphone market in Brazil in 2015.

Positivo attributed the sales drop to a reduction in shipments to the governments of Brazil, Argentina, Uruguay and Rwanda. This prompted the company to review its sales targets for the year: rather than 500.000 PCs and 150.000 tablets, the firm now expects to ship 450.000 PCs and 135.000 tablets this year.

In the first quarter of last year, Positivo reported losses of R$ 4.5m due to currency variations. Also in 2014, the company suffered with the slowdown in sales prompted by the World Cup and last year's general elections.