Home Economy News Allegro third-quarter profit rises as Polish business returns to growth

Allegro third-quarter profit rises as Polish business returns to growth


Allegro third-quarter profit rises as Polish business returns to growth By Reuters

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Economy 9 minutes ago (Nov 30, 2022 01:40AM ET)

(C) Reuters. The Allegro website is displayed in this illustration taken October 12, 2020. REUTERS/Dado Ruvic/Illustration

(Reuters) -Poland’s biggest e-commerce platform Allegro reported a rise in third-quarter core profit on Wednesday, driven by a recovery in the company’s key home market, as it managed delivery costs and saw gross merchandise value rise.

Allegro, which bought Mall earlier this year, said it was focusing on reining in costs and capital discipline as it integrates the Czech online retailer into its business while bracing for a slowdown in consumer spend.

Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 13.9% to 537.3 million zlotys ($119.16 million) beating average analysts’ expectations of 496 million zlotys in a company-compiled consensus.

Gross merchandise value (GMV), an industry metric to measure transaction volumes, jumped 21% in Poland to 12.01 billion zlotys, Allegro added.

GMV growth continued at a similar level to third-quarter in October before slowing down in November as shoppers likely postponed online browsing and purchases during the ongoing football World Cup, the company said.

“In the face of economic uncertainty and inflation, customers have less to spend, but they know that they can find great value when they shop with us,” chief executive Roy Perticucci said in a statement.

At home, Allegro’s adjusted EBITDA showed year-on-year growth of 24.6% to 587.6 million zlotys, after falling 1.5% in the second quarter as the company introduced monetisation initiatives to manage delivery costs.

A higher share of high-margin ad revenue also helped, Allegro said.

Still, Allegro stuck to the outlook it had trimmed in September for the second time this year, anticipating high inflation could lower demand for discretionary spend.

The company posted a net loss as it booked a 2.3 billion zloty write-down after recognising a fall in value of its investment in Mall and WE|DO by more than half.

($1 = 4.5091 zlotys)

Allegro third-quarter profit rises as Polish business returns to growth

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