Chinese technology and entertainment giant Alibaba reported net losses of $2.89 billion for the three months between July and September, compared with profits of $3.16 billion in the same period last year.
Revenue in local currency terms was up 3% at RMB207 billion. Reported revenue in US dollars appeared to have fallen from $31.1 billion to $29.1 billion.
More from Variety
Alibaba said the swing from profit to loss was mainly due to “an increase in net losses resulting from the decline in market prices [its] equity investments in publicly traded companies and a reduction in the share of equity method investment returns.” A large part of that depressed valuation involved the controversial financial unit Ant Financial.
Using Alibaba’s preferred non-GAAP presentation of its data,the group would have recorded a 19% year-on-year increase in net profit to RMB33.8 billion or $4.75 billion.
CEO Daniel Zhang said “solid results were achieved in an environment full of macro uncertainty.” In a regulatory filing management stated that the numbers were achieved despite “the impact on consumer demand from the resurgence of COVID-19 in China and a slowdown in cross-border commerce due to increased logistics costs and currency volatility.”
The group’s digital media and entertainment cluster – which includes a web browser, cinema ticketing platform, film production and distribution and streaming services – managed a 4% revenue increase to RMB8.39 billion ($1.17 billion). The segment’s quarterly losses fell from RMB931 million to RMB117 million ($16.4 million).
Alibaba video streaming platform Youku grew its average daily paying subscriber base by 8% year-on-year, “primarily driven by continued contribution from [its] 88VIP membership program and quality content,” said the management. “Youku continues to improve operational efficiency through disciplined investment in materials and production capacity, resulting in year-on-year reductions in losses for six consecutive quarters.”
On a conference call with financial analysts after the regulatory filing Zhang talked about the company’s long-term track record and its long-term prospects.
He said that group income is now 12 times more than when the company moved on the New York Stock Exchange in 2014. That is compared to China’s GDP which has (only) doubled in the same period.
Alibaba’s ADR shares were sold at $68 each in 2014 on the NYSE’s largest ever share listing. They peaked above $309 each in October 2020, but subsequently fell below the IPO price by the end of October 2022, as a result of uncertainty about the direction of the Chinese economy and the extent of regulatory pressure imposed by the Chinese impact on the technology sector. government. On Wednesday, before the announcement of the results, the ADR shares closed at $78.16.