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Alibaba posts first quarterly loss in nine years after US$2.8 billion antitrust fine, spoiling the sales surge on consumer recovery
- Sales increased 64 per cent to 187.4 billion yuan, beating forecasts
- The company swung to a loss of 7.65 billion yuan, after paying out US$2.8 billion in fines to the State Administration for Market Regulation (SAMR)
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Alibaba Group Holding Limited swung to a loss in its final quarter after swallowing a record fine by China’s antitrust regulators, but reported sales that surpassed forecasts as retail consumption in its home market grew with China’s recovery from the coronavirus pandemic.
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The company reported a loss of 7.65 billion yuan (US$1.185 billion), after accounting for 18.2 billion yuan in fines to the State Administration for Market Regulation (SAMR). Sales jumped 64 per cent to 187.4 billion yuan for the three months ended March, in line with analysts’ estimates.
Full-year revenue rose 41 per cent to 717.3 billion yuan. The company, which owns this newspaper, had projected full-year revenue to jump 82 per cent to a record 930 billion yuan, as consumption in its home market mostly recovered from the coronavirus pandemic. The strong results propelled Hangzhou-based Alibaba, which operates e-payment services, cloud computing and the world’s largest online shopping platforms, to its most profitable year since its establishment 21 years ago in the apartment of former English teacher Jack Ma.
“Revenue was ahead, with customer management revenue broadly in line with expectations, but a larger-than-expected step-up in investment led to a material adjusted Ebita [earnings before interest, taxes, and amortisation] miss,” Atlantic Equities analyst James Cordwell told Bloomberg. Cordwell has an overweight rating on Alibaba.
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Alibaba chairman and chief executive Daniel Zhang Yong was keen to play up growth in consumers amid the pandemic.
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