Alibaba reports 37.3% less profit

February 27, 2023 by
Frank Calviño

Alibaba reported a net profit of 48.993 billion yuan (about 6.68 billion euros) in the first nine months of its fiscal year, which will end next March 31, representing a drop of 37.3% over the same period of the previous year, the company reported in its income statement submitted to the Hong Kong Stock Exchange where it is listed. 

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In total, the Chinese company's revenues between April and December 2022 reached 660,487 million yuan (about 90,063 million euros), 1.8% more than in the same period of the previous year, despite the impact of the Covid-19 restrictions on the Asian group during the past year.

Specifically, Alibaba's commercial business in China invoiced 1% less, up to 446,658 million yuan (60,905 million euros), while the international trading platform earned 8% more, up to 50,663 million yuan (6,908 million euros). 

The Cainiao logistics business posted a nine-month turnover of 42,062 million yuan (5,735 million euros), up 22% year-on-year. Similarly, Alibaba's cloud business posted a 5% increase in turnover to 58,621 million yuan (€7,993 million).

Between October and December, the third fiscal quarter for Alibaba, the group's attributable net profit rose 69% to 46.815 billion yuan (€6.384 billion), while its sales grew 2.1% to 247.756 billion yuan (€33.783 billion).

Alibaba says demand is weaker 

"We had a solid quarter despite weaker demand, supply chain and logistical disruptions due to the impact of changes in measures by Covid-19," Daniel Zhang, president, and CEO of Alibaba Group, said in a statement. 

"Looking ahead, we expect a continued recovery in consumer confidence and economic activity," the group CEO added, asserting that "we are focused on driving growth for our customers amid the competitive landscape, as well as creating long-term sustainable value for our shareholders."

"In the last quarter, we continued to improve the efficiency of our operations and cost optimization, which resulted in solid profit growth," said Toby Xu, Alibaba's CFO, who noted that the group's liquidity remains "strong" thanks to its "healthy cash flow generation capability." 

Xu also revealed that, in its third quarter, the company repurchased some $3.3 billion in U.S.-listed shares under a plan that will allow it to buy back another $21.3 billion in holdings through March 2025.

The Chinese turnover is also down

Between October and December, turnover from trading in China - its primary line of business, where its portals Taobao and Tmall stand out - fell by 1% year-on-year, while revenue from the international section rose by 18%. However, the latter still accounts for only 8% of the total. 

Among the other segments in which the group operates, the growth of Cainiao, its logistics subsidiary, stood out; which invoiced 27% more than in the same period of the previous year and went from representing 5% to 7% of the group's total revenues.

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