South Korean e-commerce platform Kupang said its net losses in the first quarter were down 29% from a year earlier. The company recorded a net loss of $ 209.2 million in the first quarter of this year, compared to last year’s net loss of $ 295 million in the first quarter and $ 404.9 million in the 4th quarterrespectively.
Investors were thrilled with the result, sending Coupang’s share price rose more than 13% during pre-market trading.
This was announced by a company supported by SoftBank Vision its revenue issue it “recorded the highest gross profit and gross profit margin in the company’s history,” which in turn helped its product segment achieve profitability in the first quarter.
“In the first quarter, we recorded the highest gross profit and gross margin in the company’s history,” said Bom Kim, chairman of Coupang, during a call about earnings on Wednesday. “Getting more than a billion dollars in gross profit and more than 20% of gross margin. This means an improvement in gross profit by 42% for the year.
Coupang’s revenue grew to $ 5.12 billion for the period ended March 2022, compared to $ 4.2 billion in the first quarter of 2021, a 22% increase. The company also revealed that the number of its active customers grew by 13% for the year.
Saying that its results were “largely driven by initiatives to improve processes, automate and streamline supply chains”, Coupang was able to record an improvement of $ 194 million compared to the 4th quarter of 2021 in its adjusted EBITDA, seriously declining earnings .
The company was not profitable under the measure, however, revealing that its adjusted EBITDA for the 1st quarter of 2022 was -91 million dollars, although it improved compared to red ink at 132.9 million dollars a year earlier.
“Although we saw a headwind last quarter due to inflation and supply chain disruptions, our result was a net positive thanks to improved process and technology, capacity utilization, supply chain optimization and continued scaling of advertising among other areas,” Kim said. said.
According to Kim, one of Coupang’s fastest-growing offerings is Rocket Fresh, South Korea’s same-day fresh food delivery service that delivers to customers within hours of purchase. The service is available to subscribers to the Coupang membership program, Rocket Wow Club. (Such fast delivery services have become popular around the world, despite concerns about their profitability.)
The firm has recently raised the membership price for both new and existing customers to improve its profitability.
“As we mentioned, there are a lot of unpredictable variables left in the short term, but [the long term trajectory] we will continue to see growth much faster than the e-commerce segment, ”Kim said in an interview.
As the company grows in size, it expects to benefit more from economies of scale, and its ability to invest in software and hardware automation and efficiency projects will boost growth, the company said.
In March, SoftBank Vision Fund sold 50 million shares worth $ 1 billion for $ 20.87 each at Coupang after a Japanese fund sold shares of Coupang worth $ 1.69 billion in September 2021, according to statements to the U.S. Securities and Exchange Commission.