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Rocket Internet, the internet group founded by the German Samwer brothers, has posted more than disappointing results over the past six months: the company losses surpassed 500 million euro.
Global Fashion Group is culprit
The German group, with a stake in several internet companies (including HelloFresh, Delivery Hero and Home24), saw its group loss grew to 583 million euro over the past six months. This is a lot worse than last year, when the group loss was limited to 33 million euro.
The blow is mostly because of Rocket Internet’s huge devaluation of its stake in Global Fashion Group, the owner of several Zalando-type stores in Russia (Lamoda), Southeast Asia (Zalora), South America (Dafiti) and the Middle East (Namshi). Swedish shareholder Kinnevik already lowered its valuation for its stake in Global Fashion Group from three to one billion euro earlier this year.
“Heading the right way operationally”
However, the company says it is in fact doing better operationally: “The aggregate adjusted EBITDA margin improved from -32% in the first half of 2015 to -17% in the first half of 2016 and absolute EBITDA losses decreased by EUR 84 million”, Rocket Internet said.
At the same time, it so-called core brands’ turnover grew 32 % to 1 billion euro. “The first half 2016 results have shown that Rocket internet´s key portfolio companies (HelloFresh, Foodpanda, Global Fashion Group, Jumia, Home24 and Westwing) continue to progress on their path to profitability”, says Oliver Samwer, CEO of Rocket Internet. “We are on track to meet our profitability targets, with at least three of our key portfolio companies turning profitable until the end of 2017″, CEO Oliver Samwer stated.
Despite the positive news, its share still has not recovered since its IPO two years ago. Back then, it opened at 42.5 euro, but only tracks slightly above 20 euro now. Its published results did appeal to investors today, as shares went up 5.5 %.
