Chinese tech and entertainment giant Alibaba reported net losses of $2.89 billion for the three months between July and September, compared with profits of $3.16 billion in the same period last year.
Revenues in local currency terms were up 3% at RMB207 billion. Reported in US dollars revenues appeared to decline from $31.1 billion to $29.1 billion.
More from Variety
Alibaba said that the swing from profit to loss was primarily due to “an increase in net losses arising from the decrease in market prices of [its] equity investments in publicly-traded companies and a decrease in share of results of equity method investees.” A large part of those depressed valuation related to controversial financial unit Ant Financial.
Using Alibaba’s preferred non-GAAP presentation of its data, the group would have recorded a 19% year-on-year increase in net profit to RMB33.8 billion or $4.75 billion.
CEO Daniel Zhang said the “solid results had been achieved in an environment full of macro uncertainty.” In a regulatory filing management specified that the numbers had been achieved despite of “the impact on consumption demand by the resurgence of COVID-19 in China and slowing cross-border commerce due to increasing logistics costs and currency volatility.”
The group’s digital media and entertainment cluster – which spans a web browser, cinema ticketing platform, film production and distribution and streaming services – managed a 4% revenue increase to RMB8.39 billion ($1.17 billion). The segment’s quarterly losses fell from RMB931 million to RMB117 million ($16.4 million).
Alibaba’s video streaming platform Youku saw its daily average paying subscriber base increase 8% year-over-year, “primarily driven by continued contribution from [its] 88VIP membership program and quality content,” management said. “Youku continues to improve operating efficiency through disciplined investment in content and production capability, which resulted in narrowing of losses year-over-year for six consecutive quarters.”
On a conference call with financial analysts following the regulatory filing Zhang talked up the company’s long term track record and its long-term prospects.
He said that group revenues are now 12 times bigger than when the company floated on the New York Stock Exchange in 2014. That compares with China’s GDP which has (only) doubled over the same period.
Alibaba’s ADR shares were sold at $68 apiece in 2014 in what was then the NYSE’s largest ever share listing. They peaked at over $309 apiece in October 2020, but subsequently plunged to below the IPO price by late October 2022, as a result of uncertainty about the direction of the Chinese economy and the extent of the regulatory squeeze imposed on the tech sector by the Chinese government. On Wednesday, before the results announcement, the ADR shares closed at $78.16.
Best of Variety
Read More: Alibaba Slips Into Loss as Investment Values Weaken