Alibaba net income halves, revenue flat in June quarter as weaker consumption, economic headwinds hit China
- The Chinese e-commerce giant says net income fell 50 per cent to 22.74 billion yuan, better than the expected 17.8 billion yuan
- Revenues came in at 205.56 billion yuan, flat from the same period a year earlier, beating Bloomberg’s consensus estimates
Alibaba Group Holding reported better-than-expected earnings for the June quarter, even as weakened consumption and economic headwinds in China crimped the profitability of the world’s largest e-commerce retailer.
Net income fell 50 per cent year-on-year to 22.74 billion yuan (US$3.4 billion) under global accounting standards, the Hangzhou-based company said, better than the 17.8 billion yuan expected by 17 analysts surveyed by Bloomberg.
Sales stagnated at 205.56 billion yuan, compared with 205.74 billion yuan a year ago, beating Bloomberg’s consensus estimate of 203.36 billion yuan.
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Daniel Zhang Yong, chairman and chief executive of Alibaba, said gross merchandise volumes (GMVs) – a measure of transactions of goods – on Taobao and Tmall experienced a “mid-single-digit percentage decline year-on-year”.
Still, the company “saw signs of recovery since June, as logistics and supply chain situation gradually improved after Covid restrictions eased”, Zhang said.
In a research note on Thursday, analysts at Morgan Stanley said “the results show Alibaba’s potential to drive efficiency, which was underestimated. Mid-single-digit GMV decline is better than feared.”
Alibaba’s results come as China’s economy has been battered by the country’s worst Covid-19 outbreak since the spring of 2020.
