Singapore's Sea Tumbles 14% After Wider Than Expected Loss




  • In Business
  • 2022-08-16 23:31:27Z
  • By Bloomberg

(Bloomberg) -- Sea Ltd. posted a bigger loss than expected and withdrew its 2022 e-commerce forecast, joining other online giants struggling to gauge an increasingly uncertain global economic outlook.

Most Read from Bloomberg

  • Saudi Billionaire Made $500 Million Russia Bet at War Onset

  • 'Next Generation' Moderna Coronavirus Booster Jab Approved for Use in Adults

  • These Six Cities Are Emerging as New Expat Hot Spots

  • America's $7 Trillion Retirement Crisis Is Only Getting Worse

  • Wells Fargo Plans Major Retreat From Mortgage Business It Long Dominated

The Singapore-based company posted an adjusted loss before interest, taxes, depreciation and amortization of $506.3 million in the June quarter, surpassing the average projection for $482.3 million. Its net loss more than doubled to over $931 million in the June quarter.

Sea shares dropped 14% to $77.43 in New York trading. Once Southeast Asia's most valuable company, the company's shares have fallen more than 75% since peaking in October.

The downbeat result came after Sea cut its full-year e-commerce revenue outlook in May, to a low of $8.5 billion versus $8.9 billion previously. Shoppers emerging from pandemic lockdowns are cutting back on online purchases, shifting toward essentials during a potential recession.

Alicia Yap, analyst at Citigroup Inc., said the suspension of e-commerce revenue guidance "will no doubt send unease to investors sentiment."

Sea, which counts Tencent Holdings Ltd. as its biggest investor, has suffered a run of setbacks this year, including a sudden ban of its most popular mobile game in India and the subsequent closure of its e-commerce operations there.

The company has been trying to boost profitability as topline growth plateaus. Second-quarter sales rose 29% to $2.9 billion, the slowest growth in almost five years.

Sea Ltd Sales to Grow Despite Ebitda Losses: Preview

Key Insights

  • In Southeast Asia and Taiwan, adjusted Ebitda loss per order for Shopee -- before allocation of headquarters' common expenses -- was less than 1 cent. Chief Executive Officer Forrest Li affirmed a target for the business to hit positive adjusted Ebitda before HQ costs in Asia this year

  • Second-quarter revenue from Shopee, Sea's e-commerce unit, gained 51% to about $1.7 billion versus estimates of $1.9 billion.

  • Revenue from gaming arm Garena fell to $900.3 million, slightly ahead of estimates for $827.6 million, as hit mobile game Free Fire matures. The company said in March it expected Garena to post $2.9 billion to $3.1 billion in bookings in 2022, set to be its first decline ever.

  • Revenue from SeaMoney, Sea's digital financial services unit, rose to $279 million.

Get More

  • Sea has been reducing its overseas footprint and slashing jobs in peripheral businesses as competition takes a toll and as it focuses more on profitability, a stark shift from its previous stance of spending for global expansion.

  • Shopee's gross merchandise value, the sum of transactions flowing through its platform, rose 27% to $19 billion.

  • Some investors are reducing their exposure to Sea. Tiger Global Management LLC sold $473.8 million of Sea shares, cutting its holdings after six quarters of buying, according to SEC filings. Altimeter Capital Management LP, a shareholder of Singapore-based Grab Holdings Ltd., exited Sea's Class A-ADRs, according to an analysis of its filings by Bloomberg News.

(Updates shares in third paragraph.)

Most Read from Bloomberg Businessweek

  • Whole Foods' Battle Against Black Lives Matter Masks Has Much Higher Stakes

  • Andreessen Horowitz Thinks It's Time for Adam Neumann to Build

  • Being Thrown Off Social Media Was Supposed to End Alex Jones's Career. It Made Him Even Richer

  • Chinese Shun Debt and Pile Up Savings, Threatening Global Growth Engine

  • London Lures Top Facebook Executives

©2022 Bloomberg L.P.

COMMENTS

More Related News

NYC Gives $225,000 in Debt Relief to Struggling Taxi Drivers
NYC Gives $225,000 in Debt Relief to Struggling Taxi Drivers

(Bloomberg) -- New York City has arranged over $225 million in debt relief for more than 1,000 taxi medallion owners to aid an industry battered by...

Nike
Nike's Inventory Glut Sends Stock Down the Most in 20 Years

(Bloomberg) -- Nike Inc. shares tumbled the most in more than two decades after a glut of unwanted merchandise eroded the sportswear giant's...

Airlines Had a
Airlines Had a 'Revenge Travel' Summer. The Stocks Went Nowhere

(Bloomberg) -- Airlines enjoyed a hot summer, as "revenge travel" and steep fare increases gave the companies a boost. But investors have been reluctant to...

Cotton Heads for Worst Month Since 1986 as Economy Hits Demand
Cotton Heads for Worst Month Since 1986 as Economy Hits Demand

(Bloomberg) -- Cotton headed for its worst month in more than three decades as fears of a global economic slowdown threatens to stifle demand for apparel and...

Truss Meeting With OBR Ends With No Sign of Policy U-Turn
Truss Meeting With OBR Ends With No Sign of Policy U-Turn

(Bloomberg) -- Most Read from BloombergMacKenzie Scott Files for Divorce From Science Teacher HusbandMeta to Cut Headcount for First Time, Slash Budgets...

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: Business