Coupang reports third quarter net loss of $ 324 million

Coupang office in Songpa district, south of Seoul [NEWS1]

Coupang Inc., the New York-listed parent company of Korean company Coupang Corp., lost $ 324 million on a net basis in the third quarter, compared to a net loss of $ 173 million in the same quarter in 2020.

Following the results, which were released Friday morning in the US and were slightly below expectations, the stock fell 8.94%.

Third-quarter revenue was $ 4.64 billion, up 48% year-on-year, according to a regulatory filing, while operating loss was $ 315.11 million, against an operating loss of $ 216.24 million the previous year.

Quarterly figures indicate a slowdown or stagnation in growth. The company reported 16.8 million active users in the third quarter, up from 17.0 million in the previous quarter. Net sales increased 3.7% quarter on quarter.

Some investors in the United States have focused on the lingering losses – the company has never made a profit despite having been around for over a decade – and the fact that it appears to be buying growth, chomping on capital to make sales.

Coupang Inc. has lost $ 1.1 billion so far in 2021.

Besides Coupang Corp., the e-commerce company, Coupang Inc. operates Coupang Play and Coupang Eats.

Management insists that all is well.

“The additional costs and investments associated with Covid to expand infrastructure and develop our long lifespan masks the full extent of progress,” Kim Bom, founder and CEO of the Delaware-incorporated company, said on a call to the results on Friday. He said “the additional labor and operating costs associated with Covid” as well as the company’s investment in early morning and food delivery services contributed to the loss.

Coupang said its operations were affected by the loss of one of its largest distribution centers, in Bucheon, Gyeonggi, following a fire in June, and by continued center closures due to Covid cases. -19. It added 8 million square feet of infrastructure in the third quarter of 2021. The distribution center infrastructure for its fresh grocery offering jumped nearly 90% in the third quarter.

Total net revenue per active customer was $ 276, up 23% from the previous year and 4.9% from the prior quarter. Net revenue per active customer is the total net revenue generated during a period divided by the total number of active customers during that period.

“The Korean e-commerce segment is on track to reach annual sales of around $ 200 billion by 2024 and is expected to become the third in the world after the United States and China,” Kim said.

“Advertising revenue almost tripled year over year in the third quarter. We are only at the start of the heats, ”he said. Regarding the company’s expansion overseas, he said the expansion was “at a more nascent stage.”

Coupang offers a delivery service in Japan.

Coupang shares were sold in an initial public offering in March at $ 35, opened at $ 63.50 and hit a record high of $ 69 on day one of trading. Last month, an all-time low of $ 25.75 was hit.

The shares closed in New York on Friday at $ 26.58.

BY JIN MIN-JI [jin.minji@joongang.co.kr]

Ann J. Cox