China’s leading e-commerce company
Alibaba
BABA 1.48%
Group Holding Ltd. posted its first quarterly revenue decline since its 2014 listing in a sign of how its era of explosive growth may be coming to an end.
The drop was slim, at 0.09%, from a year earlier, though still notable for the Hangzhou-based company, which for years has been among China’s fastest-growing technology companies.
Alibaba said Thursday its April-June revenue was the equivalent of $30.7 billion, based on an end-June exchange rate of about 6.7 yuan to a dollar that Alibaba used.
Net income attributable to ordinary shareholders fell 49.6% to the equivalent of $3.4 billion.
Alibaba blamed China’s Covid-19 outbreak for the revenue drop, saying its main domestic e-commerce business was hit by pandemic-related supply chain and logistics disruptions in April and May.
The company has been grappling with several challenges, including reduced domestic consumption linked to stringent Covid-19 restrictions, rising competition and regulatory pressures in both the U.S. and China.
“Following a relatively slow April and May, we saw signs of recovery across our businesses in June,” said Alibaba Chief Executive
Daniel Zhang
in a statement.
China’s economy slowed down considerably in the April-June period, recording its weakest growth rate in more than two years, as the country stuck to its zero-tolerance policy to combat Covid-19. Gross domestic product expanded at a 0.4% annual rate during the period.
“‘Following a relatively slow April and May, we saw signs of recovery across our businesses in June.’”
Much of the hit on the economy in the last quarter was concentrated in April, when lockdowns were most widespread. The financial and export hub Shanghai was locked down for about two months until the beginning of June.
In May, Alibaba didn’t give an annual forecast, citing the unpredictability around Covid-19 disruptions. Chinese leaders acknowledged that the country would miss its official GDP target of 5.5% growth for this year.
More recently, local governments across China have grown more adept at controlling Covid-19 outbreaks swiftly and with fewer disruptions than in previous months. Retail sales rose 3.1% in June from a year earlier, bouncing back from a 6.7% fall the previous month, and showing significant improvement from April’s 11% decline.
Last week, the U.S. Securities and Exchange Commission added Alibaba to a list of Chinese companies at risk of being delisted from the U.S. exchanges if their audit papers can’t be inspected before the spring of 2024. Alibaba said it would comply with laws and regulations.
Alibaba’s American depositary receipts have fallen around 55% over the past year.
Alibaba’s quarterly revenue in its reporting currency was at 205.56 billion yuan, beating analyst estimates, compared with the year-earlier figure of 205.74 billion yuan. It posted 22.7 billion yuan in net income, compared with 45.1 billion yuan a year earlier.
Write to Shen Lu at shen.lu@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
China’s leading e-commerce company
Alibaba
BABA 1.48%
Group Holding Ltd. posted its first quarterly revenue decline since its 2014 listing in a sign of how its era of explosive growth may be coming to an end.
The drop was slim, at 0.09%, from a year earlier, though still notable for the Hangzhou-based company, which for years has been among China’s fastest-growing technology companies.
Alibaba said Thursday its April-June revenue was the equivalent of $30.7 billion, based on an end-June exchange rate of about 6.7 yuan to a dollar that Alibaba used.
Net income attributable to ordinary shareholders fell 49.6% to the equivalent of $3.4 billion.
Alibaba blamed China’s Covid-19 outbreak for the revenue drop, saying its main domestic e-commerce business was hit by pandemic-related supply chain and logistics disruptions in April and May.
The company has been grappling with several challenges, including reduced domestic consumption linked to stringent Covid-19 restrictions, rising competition and regulatory pressures in both the U.S. and China.
“Following a relatively slow April and May, we saw signs of recovery across our businesses in June,” said Alibaba Chief Executive
Daniel Zhang
in a statement.
China’s economy slowed down considerably in the April-June period, recording its weakest growth rate in more than two years, as the country stuck to its zero-tolerance policy to combat Covid-19. Gross domestic product expanded at a 0.4% annual rate during the period.
“‘Following a relatively slow April and May, we saw signs of recovery across our businesses in June.’”
Much of the hit on the economy in the last quarter was concentrated in April, when lockdowns were most widespread. The financial and export hub Shanghai was locked down for about two months until the beginning of June.
In May, Alibaba didn’t give an annual forecast, citing the unpredictability around Covid-19 disruptions. Chinese leaders acknowledged that the country would miss its official GDP target of 5.5% growth for this year.
More recently, local governments across China have grown more adept at controlling Covid-19 outbreaks swiftly and with fewer disruptions than in previous months. Retail sales rose 3.1% in June from a year earlier, bouncing back from a 6.7% fall the previous month, and showing significant improvement from April’s 11% decline.
Last week, the U.S. Securities and Exchange Commission added Alibaba to a list of Chinese companies at risk of being delisted from the U.S. exchanges if their audit papers can’t be inspected before the spring of 2024. Alibaba said it would comply with laws and regulations.
Alibaba’s American depositary receipts have fallen around 55% over the past year.
Alibaba’s quarterly revenue in its reporting currency was at 205.56 billion yuan, beating analyst estimates, compared with the year-earlier figure of 205.74 billion yuan. It posted 22.7 billion yuan in net income, compared with 45.1 billion yuan a year earlier.
Write to Shen Lu at shen.lu@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8