- Alibaba’s profits fell 37.4 percent in the first nine months of the fiscal year. Previously, until the first half of the year, the blow had been brutal.
- The causes: an improvement in activity in China, by far its largest market. In addition, there are good negotiations with Beijing to favor private investment, which has generated “good vibes” among investors.
- Among the other sectors in which they have operations, the company highlighted the growth of Cainiao, Alibaba’s logistics company.
The Chinese private consortium dedicated to Internet e-commerce Alibaba recorded a net profit of more than 7.1 billion dollars in the first three quarters of its fiscal year, between last April and December, which represents a drop of 37.4 percent compared to the first nine months of the previous fiscal year.
In total, the company’s revenue between April and December rose to $95.7 billion, up 1.7 percent from the same period last year.
In its earnings report, filed with the Hong Kong Stock Exchange, the Chinese conglomerate said that its results between October and December were solid despite the decline in demand, difficulties in supply chains and the blow from changes in the measures adopted by the country’s authorities to curb the covid-19 outbreak.
Specifically, the company’s net profit rose 138 percent year-on-year between October and December due to a sharp reduction in the decline in the goodwill value of its digital media and entertainment divisions.
Alibaba’s earnings improve after bad 2021
These numbers contrast with the $2.9 billion loss Alibaba suffered between July and September caused by coronavirus measures and a drop in the market prices of listed companies in which the company has invested, which caused profit in the first six months of the fiscal year to be down 96 percent from the first half of the previous year.
“During the last quarter we continued to improve the efficiency of our operations and cost reduction, which generated strong earnings growth,” said the company’s chief financial officer, Toby Xu.
Alibaba highlights that the company’s liquidity is solid due to its strong cash flow generation capability.
The CFO said that, in the third quarter, the company repurchased some $3.3 billion in US-listed shares as it pursues a $21.3 billion share buyback project over the next three years.
In the third quarter, revenue from commerce in China, its most important business, where the Taobao and Tmall sites are located, suffered a 1 percent drop compared to the same period last year, while turnover from the international unit increased by 18 percent, even though the latter still accounts for only 8 percent of the total.
Cainiao grows hand in hand with logistics
Among the other sectors in which they have operations, the company highlighted the growth of Cainiao, the logistics company that recorded revenue growth of 27 percent over the third quarter of the previous year and now accounts for 7 percent of Alibaba’s total revenue.
Looking ahead, the company’s chairman and CEO, Daniel Zhang, said he expects a steady recovery in consumer confidence and economic activity and stressed that the company wants to grow for its customers in an industry where competition is increasingly intensifying.
On the other hand, it was learned that this week Alibaba divested more of its businesses in India. In this case, it was the turn of Paytm.
Alibaba’s decision to divest its presence in India’s main payment network was taken against the backdrop of strong tension between Beijing and New Delhi.
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