The Coupang headquarters in Seoul. (Coupang)
South Korean e-commerce giant, Coupang, raised its earnings forecast for the year after posting its first-ever profit for the entire business in the second quarter, as bigger operating cost savings and higher membership fees improved profitability, the company said Thursday.
The company is betting on positive annual earnings before interest, tax, depreciation and amortization, reversing the previous projection for a $400 million loss. The second quarter loss narrowed to $67.14 million, down 87 percent a year earlier, while total net revenue soared 12 percent to $5 billion.
And the adjusted EBITDA came to $66.17 million – the first profit for the company since 2014, when it rose to prominence with its 24-hour delivery service called “Rocket Delivery.” The Seoul-based company was listed on the New York Stock Exchange in 2021.
“The main drivers were improvements in technology, infrastructure, automation, supply chain optimization and the continued growth of various offerings like advertising,” Founder and CEO Kim Bom said on a post-earnings conference call. Coupang also saw active customers rise 5 percent on-year in the second quarter.
Inflation and fuel costs are potential disruptions ahead, but the e-commerce giant will achieve the long-term targets of 7 to 10 percent or a higher adjusted EBITDA margin, Kim added, noting the pace of improvement in profitability would take place unevenly.
The earnings report comes as Coupang looks to diversify its revenue stream. This week, it received approval from Korea’s top financial watchdog to start financial services offering installment loans to businesses using its online platform and to customers making purchases from them.
By Choi Si-young (firstname.lastname@example.org