Among the new features announced are launching a new generation of transponders and installing a manufacturing unit to produce pluggable devices.
Padtec Holding (B3: PDTC3) – the sole shareholder of Padtec S/A, a leading manufacturer of optical transport systems – ended the first quarter of 2024 with net revenue of R$ 58.4 million, a drop 26.3% compared to the same period last year. Gross profit also fell, reaching R$ 14.9 million in the quarter – in the same period in 2023, it reached R$ 28.5 million.
These results are mainly a consequence of the typical seasonality of the first quarter, the momentary saturation of network stocks and capacity in the telecommunications sector, in practically all the markets in which Padtec operates. “Throughout 2023, Padtec achieved robust results, excellent profitability and maintained a solid capital structure, expanding its revenue sources through a strategy of operating in new markets and diversifying its product and service lines”, states Carlos Raimar, CEO and Investor Relations Officer at the company.
To face market challenges, Padtec carried out a cost adjustment, in terms of personnel and raw material costs. Controlling production costs is Padtec’s permanent focus, which has the advantage of manufacturing and developing many of its products locally in Brazil. Furthermore, the company renegotiated contracts with suppliers in the first quarter. “Our estimates indicate that such restructuring could add up to R$ 30 million in savings over the next 12 months”, reveals Ramon Pereira, Chief Financial Officer at the company. “To maintain our cash flow with greater liquidity availability and create space to support growth, we renegotiated the debt and took out new lines of credit. For the near future, we already have lines approved in the amount of R$ 150 million, which will support the planned growth on new fronts,” he adds.
At the same time, Padtec has intensified product launches and developed actions focused on expanding markets and diversifying its portfolio, through commercial partnerships and alliances with international product suppliers. In March, the company announced two commercial partnerships aimed at expanding its presence in the Latin American market: with Hayex Technology, which operates mainly in Peru, and with Kubos Tecnologia, in Colombia.
Furthermore, Padtec signed an agreement with Parallel Wireless, one of the main providers of independent solutions in Open RAN (open radio access networks), intending to expand its portfolio of solutions for the mobile market – including 5G. Another important partnership has just been signed with Arrcus, a software provider for large data center networks (hyperscale) and for core/edge networks – which will allow Padtec to complement its portfolio in IP switches and routers, a market it entered in 2023, through an agreement with UfiSpace, from Taiwan.
“These new solutions complement existing offers and will support the growth of market segments such as the new private networks that are being implemented in various industrial and agribusiness sectors”, emphasizes Carlos Raimar. He also highlights the evolution of Padtec’s product line, the result of the company’s constant investment in research, development, and innovation. “We achieved good results in the first tests carried out in real networks with prototypes of the new generation of Padtec transponders, the LightPad Max, scheduled to be launched in the first half of the year. These are disaggregated dual transponders of up to 800 Gb/s per optical channel (1.6 Tb/s in total) for medium, long, and ultra-long distances”, reveals the executive.
Raimar also adds that Padtec is installing a specific manufacturing unit to produce its own pluggable (coherent transceivers with high transmission capacity). “This equipment will be intended for internal consumption and, indirectly, will contribute to increasing the presence of Padtec’s high-capacity DWDM solutions in metropolitan networks, as well as new demands in hyperscale data centers and also in edge data centers”, he concludes.
The full results report is available on the ‘Investor Relations’ page of the Padtec website (www.padtec.com.br/investor/padtec-holding/).