Alibaba’s net income drops 53% YoY to $3b in Q2 2022
This is affected by the decline in the income from operations, amongst others.
Alibaba posted a 53% year-on-year decline in net income to around $3b in the second quarter of 2022 due to decreases in income from operations and net gains amongst other factors.
In a statement, Alibaba said its income attributable to ordinary shareholders was down 50% to around $3.4b.
“The year-over-year decreases were primarily attributable to the decrease in income from operations, the decrease in share of results of equity method investee, as well as the decrease in net gains arising from change in market prices of our equity investments in publicly-traded companies,” it said.
The company said its income from operations during the quarter decreased by 19% to around $3.7, which accounted for 12% of the revenue, mainly due to the decline in China commerce adjusted earnings before interest, taxes, and amortisation (EBITA) because of drop in customer management revenue.
Alibaba said the decline in customer management revenue of 10% YoY to around $10.8b was due to the mid-single-digit decline year-over-year in gross merchandise value of Taobao and Tmall, excluding unpaid orders.
This was also due to the rise in order cancellation because of the COVID-19 resurgence and restrictions, resulting in supply chain and logistics disruptions in April and most of May.
It added the decline of China commerce adjusted EBITA by 14% YoY was partly offset by the narrowed adjusted ABITA loss of local consumer services due to Ele.me’s improved unit economics per order.
Overall, revenue during the quarter remained stable compared to the same period last year at around $30.7b.
Alibaba Group CFO Toby Xu said they have also narrowed losses in key strategic businesses due to the improvements in operating efficiency and focusing on cost optimisation.
“During the past quarter, we actively adapted to changes in the macro environment and remained focused on our long-term strategy by continuing to strengthen our capability for customer value creation,” he said.
“Following a relatively slow April and May, we saw signs of recovery across our businesses in June. We are confident in our growth opportunities in the long term given our high-quality consumer base and the resilience of our diversified business model catering to different demands of our customers,” he added.