Alibaba Q2 Profit Down 60%, But Adj. Profit Rises

(RTTNews) - Alibaba Group Holding Limited (BABA) reported that its second-quarter net income attributable to ordinary shareholders was RMB28.77 billion or $4.24 billion, a decrease of 60% from the prior year's RMB72.54 billion, when it booked a significant one-time gain upon the receipt of the 33% equity interest in Ant Group. Earnings per ADS in the quarter was RMB10.48 or US$1.54 a decrease of 62% from RMB27.51 in the prior year.

Excluding the one-time gain, non-GAAP earnings per ADS in the quarter was RMB17.97 or $2.65, an increase of 37% from RMB13.10 in the same quarter of 2019. Analysts polled by Thomson Reuters expected the company to report earnings of $2.11 per share for the second-quarter. Analysts' estimates typically exclude special items.

Income from operations was RMB13.63 billion or $2.01 billion, a decrease of 33% year-over-year due to a RMB 15.75 billion increase in share-based compensation expense related to Ant Group share-based awards granted to its employees.

Excluding the impact, income from operations would have increased 44% year-over-year, to RMB29.69 billion or US$4.37 billion in the second quarter ended September 30, 2020.

Revenue for the quarter was RMB155.06 billion or $22.84 billion, an increase of 30% from last year's RMB 119.02 billion, mainly driven by the robust revenue growth of its China commerce retail, cloud computing and Cainiao logistics services businesses. Analysts expected revenues of $23.17 billion for the quarter.

Revenue from China commerce retail business in the quarter ended September 30, 2020 was RMB95.47 billion or $14.06 billion, an increase of 26% compared to RMB75,786 million in the same quarter of 2019.

Earlier this week, Alibaba said that Ant Group's world biggest initial public offering in Shanghai and Hong Kong was suspended.

In late-October, reports said Alibaba-affiliated Ant Group would raise about $34.5 billion in its dual public offering, making it the biggest stock market listing in history. It was expected to begin trading in Shanghai and Hong Kong on November 5.

The previous record for a listing was held by Saudi Aramco, which raised $29.4 billion last December.

Jack Ma's Alibaba holds about 33 percent ownership in Ant Group.

The Shanghai Stock Exchange has suspended initial public offering of Ant Group, as the company may not meet listing qualifications or disclosure requirements due to material matters relating to the regulatory interview of its ultimate controller, executive chairman and chief executive officer by the relevant regulators and the recent changes in the Fintech regulatory environment.

Consequently, Ant Group's concurrent proposed H share listing on the Main Board of The Stock Exchange of Hong Kong Limited was also suspended.