JD.com swings back to profitability in first quarter though profits tumble 53%
The subdued results came after the firm reported its first quarterly loss in the fourth quarter last year amid an ongoing price war
Chinese online shopping giant JD.com reported a 53.2 per cent year-on-year decline in first-quarter profit to 5.1 billion yuan (US$750.2 million) due to protracted competition on the e-commerce and food delivery fronts.
The company was able to swing back to profitability after posting a loss in the previous quarter. Under non-generally accepted accounting principles which excludes one-off costs and non-cash items, JD.com posted a net income of 7.4 billion yuan in the March quarter, compared with 12.8 billion yuan a year ago.
Net revenue rose 4.9 per cent year on year to 315.7 billion yuan in the period, according to the company’s earnings result released on Tuesday. That was higher than the 1.5 per cent increase seen in the previous quarter.
The subdued results came after the Beijing-based firm reported its first quarterly loss in the fourth quarter last year amid an ongoing price war in food and on-demand delivery that throttled revenue across the sector and coincided with dampened consumer demand after Beijing scaled back a national subsidy programme.
JD.com CEO Sandy Xu Ran said in the earnings release that “our user base and shopping frequency continued to expand robustly, with annual active customers hitting a new record”.
Analysts had expected the company to narrow losses and improve revenues after it enhanced operational efficiency in its food delivery business, according to a research note published last week by Citic Securities.