Business & Economy

Alibaba’s net profit drops 5 percent in 1st quarter

Shanghai, China, Aug 3 (EFE).- Chinese e-commerce giant Alibaba on Tuesday posted a net profit of 45.14 billion yuan ($6.98 billion) between April and June, a 5 percent drop compared to the same period last year.

The group’s revenue in the first quarter of the financial year 2021-22 rose to 205.74 billion yuan, a 34 percent growth year-on-year.

“We are investing our excess profits and additional capital to support our merchants and invest in strategic areas to better serve customers and penetrate into new addressable markets,” Maggie Wu, the chief financial officer of Alibaba Group, said in a statement.

The investments led to an 11 percent drop in the group’s operating profit, while the operating margin also dropped from 23 percent to 15 percent.

Chinese authorities had also slapped a record fine of around $2.82 billion on Alibaba for violating anti-monopoly norms, which led to the company’s liquidity dropping by nearly 33 percent, although Wu insisted that liquidity continued to be “strong.”

The conglomerate seems to have rubbed the Chinese authorities the wrong way in recent times and apart from the fines, last year the government also stalled the stock listing of its financial subsidiary Ant Group – touted to be the largest in history – at the last minute.

Although Alibaba’s stocks in the Hong Kong exchange rose 0.83 percent on Tuesday, they lost around 15 percent of their value since the beginning of this year. EFE


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