Good day, ladies and gentlemen. At this time, we would like to welcome everyone to Positivo Tecnologia's 1Q 2018 earnings conference call. Today, we have with us Lincon Ferraz, Financial and Investor Relations Officer. We would like to inform you that you will be in listen-only mode during the company's presentation. After Positivo Tecnologia's remarks are completed, there will be a question-and-answer session. At that time, further instructions will be given. If any participant will need assistance during this call, please press star one zero to reach the operator. We have simultaneous webcast that may be accessed through the company's website, ir.positivotecnologia.com.br and MZiQ platform.
The slide presentation may be downloaded from this website, and please feel free to flip through the slides during the conference call. Before proceeding, let me mention that forward-looking statements are being made under the safe harbor of the Private Securities Litigation Reform Act of 1996. Forward-looking statements are based on the beliefs and assumptions of Positivo Tecnologia's management and on information currently available to the company.
They involve risks, uncertainties, and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions, and other operating factors could also affect the future results of Positivo Tecnologia and could cause the results to differ materially from those expressed in such forward-looking statements. Now, I would like to turn the call over to Mr. Lincon Ferraz, Positivo Tecnologia's Financial and Investor Relations Officer. Mr. Lincon, you may begin your conference.
Thank you. Good morning, everyone. We are here to present the results for the first quarter in 2018, when the company posted a 62% growth in the PC sales in Brazil. We have been facing a continuous recovery of demand in the country with a total market growth of 20% in the quarter. Positivo Tecnologia surpasses this performance with a 62% growth in terms of volume, of which 57% in retail, 77% in government, and 63% in corporate. So we grew in all the segments that we have in the PC business.
This resulted in a strong increase in market share of 4 percentage points in PCs in Brazil during the quarter. On the other hand, mobile phone market is still very competitive environment, and the sales are concentrated on the three largest manufacturers. The company posted net income of BRL 2 million in the quarter, reversing the loss recorded in the previous year. Two special highlights. The first one is the market entry of accessories for electronics and other devices in partnerships with Anker.
Anker is a brand with a strong presence in the U.S.A., Japan, and Europe. Finally, the sponsorship agreement with Corinthians, is one of the biggest soccer teams in Brazil, and which should generate more visibility for the brand. Following on page four, here we have some color on the PC segment as a whole. Basically, we have the continuity of demand recovery following the confidence and credit indexes. As I mentioned, PC market grew 20% in the quarter. The consumer confidence is in the highest level in four years in Brazil. As you can see in the graph in the left side below.
In this scenario, the company tried to capture this moment and grew more than the market, especially with notebooks with better configuration. The Intel Core, or the Klein, the VAIO brand, these two categories grew a lot in the first quarter. Our market share reached 17%, 5 percentage points more than the 13% figure that we have in first quarter 2017. In the graph in the right side below, you can see that the notebooks with mid and high configurations represented 32% of the revenue of notebooks in the retail in Brazil.
This is very significant growth. We are focusing more on these categories, and we see more room to grow in Brazil because the market for mid and high configurations is bigger in Brazil in comparison with the entry-level segment. We are focusing and getting good results. On page five, you can see the mobile phone market. The price war among the leading brands continued in this quarter. As you can see in the first graph on the left, the top three brands, they consolidated. They have 81% market share in Brazil. This was around 70% in 2016.
The room for other brands reduced by 1/3 from 28%- 19%, and our market share reduced accordingly. It gotten a peak of 5% in Q1 2017. Now, is around 3%. Here we have some graphs of the top-selling smartphones in the country. From these three brands, you can see the price cut year-on-year. In March 2017, June, September, December, and March 2018. You can see that all the top-selling smartphones, they have their price reduction. Moving to page six. Here we have more detail on the Anker agreement.
For us, represents a market entry in the accessories business. This is a business that is growing fast in Brazil, and they have better margins when compared to PCs and smartphones. Anker is a very consolidated brand. It is present in seven countries, and it has relevant market position in U.S.A., Japan, and Europe. It is a top-selling power bank brand, and also, in the earphone Bluetooth product line is the number one in Germany. We have exclusivity until 2024, with the possibility of being renewed, and our sales will be direct from the website www.ankeroficial.com.br.
We will also be present in marketplaces and also in the retail stores. We are very excited with this partnership, and we will try to repeat the success of Anker in Brazil, just like they have in the main segments, in the main markets like U.S.A., Japan, and Europe. Moving to page seven. Here is the sponsorship with Corinthians. We have a contract until October. We have an extension up until December 2018. The team is doing very well in the competitions this year, so it is very possible that we will opt to extend our contract.
This soccer club has around 30 million fans. This is one of the largest fan base in the world. We expect a strong brand exposure on primetime TV and top-tier media channels. Moving now to page eight. This is the company outlook. The PC business in the retail, we see a continuity of the retail sales growth based on consumption and also the credit indicators. There is one issue, which is the pass-through on pricing of the recent dollar appreciation. We need to do that, and it is very tough, the discussion with the retailers.
In the government, we have an expectation of higher revenue in 2018, because the public bidding in Brazil is bigger this year than it was in 2017. Our winning ratio is stable, so we expect more revenue. Mobile phones, our sales performance in the second quarter and the next quarters will be very linked to the aggressivity of the competitors. We expect them to be less aggressive, so we should improve sales. Also, in this segment, we have the issue of the pass-through on pricing of the dollar appreciation.
In terms of cash generation, we have an increase in net debt in March 2018 because of the working capital needed to face the sales growth that we are expecting, and we expect this to normalize in the end of the year. Our joint venture with Hi Technologies is in the final stage of discussions with investors for a new fundraising round. We expect to close the deal in the coming months, and soon we will have some news on this side.
Digital TV project, we increased our forecast to BRL 125 million from BRL 70 million after being declared the winner of the last round promoted by Seja Digital, which is the final client. Moving to the financial results, page 10. Here you can see some graphs on sales volume. The PC sales increased a lot, as you can see, both in retail, government, and corporate. It was boosted by Brazil. Positivo brand grew by 62%, and other regions where we operate with Positivo BGH brand was flat year-on-year. Tablet sales, in Brazil, we almost don't sell tablets. We sell only for corporate clients.
Positivo BGH sales of tablets reduced by 59% because of the Kenya project that the first quarter 2017, we were delivering educational project in Africa, and now we don't have this. Mobile phones, as I mentioned, we have a reduction of 53% in smartphones driven by the competition. The first quarter 2017 was the last quarter before the price cut of the main players. You can see that in feature phone, the sales were almost flat. We don't have this competition in feature phone.
We expect in the coming quarters to have a better comparison basis, because as of the second quarter 2017, the sales were in the same level that we have in the first quarter 2018. Page 11, net revenue. Total BRL 429 million in the first quarter. It was 5% less when compared year-on-year, mainly because of mobile phone sales. This also impacted the retail revenue, which reduced by 13%. If you analyze all of the PCs in the retail, the net revenue would have increased by 57%. The average prices, you can see a reduction mostly because of configurations, except for the notebooks.
In the notebooks, we have a 13% increase due to the better configurations profile that I mentioned. Page 12. Here we can see some of the operational results. The sales margin reached 9% in the first quarter. This is next to the historical level. When we compare with the first quarter 2017, we have a reduction of 2 percentage points, driven by the higher proportion of mid- and high-end laptops, which have a lower margin, and also the discounts that we applied on mobile phone sales to thrive in a competitive environment.
If you take a look at G&A expenses, it was a small reduction of 2% when we compare the recurring expenses, and the total, it was a reduction of 9%. Moving to page 13. Adjusted EBITDA closed the quarter at BRL 23 million. It generated a multiple net debt over EBITDA of 2x , very conservative. Our financial result was much better than one year ago, mainly because the exchange rate variation, which was BRL 40 million negative last year, and now it was neutral. Also the cost of debt that reduced a lot from BRL 18 million- BRL 8 million.
Most of our debt is linked to the basic interest rate. So all the reduction that we had in the last month, we can capture here. Also, we are carrying less cash. So the cost to carry cash reduced a lot. This helped us to generate a net income of BRL 2 million, reversing the loss that we had one year ago. Moving to the final page, 14.
Working capital increased by BRL 54 million when compared to December 2017. Mostly because of the working capital needed to face the better sales that we are forecasting for the coming months. You can see this in the inventory discounted by the suppliers, increased by BRL 88 million. So we purchased more components because we need to sell more in the coming months. Net debt increased accordingly by BRL 90 million- BRL 235 million. So I finish my presentation here. Thank you very much for your attention.
Thank you. The floor is now open for questions. If you have a question, please press star then one on your touch-tone phone at this or at any time. If at any point your question is answered, you may remove yourself from the queue by pressing star then two. Questions will be taken in the order they are received. We do ask that you pose your question, that you pick up your handset to provide optimum sound quality. If you are connected in the webcast, click on the question button, and please hold while we poll for questions. There look to be no questions at this time, so I will turn the call over to Positivo Tecnologia for final considerations.
Well, that's it. It was a better quarter with a bigger sales volume for PCs. We are motivated for the year, and we have an issue with the dollar appreciation, and we need to deal with this with the retailers. But overall, it's a good perspective. Thank you very much, and see you in the next conference call. Bye-bye.
Thank you. This concludes today's Positivo Tecnologia