Alibaba’s Q3 net profit slumps 74%

Alibaba’s net profit plummeted 74% year on year in the third quarter of the financial year ending (FYE) March 2022.

The ecommerce major’s quarterly net profit attributable stood at US$3.2 billion, while its revenue rose 10% from a year ago to about US$38 million, the company said in a statement. This was however the slowest revenue growth for Alibaba since its 2014 US listing, noted a CNBC report.

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The decline in net profit was primarily due to the impairment of goodwill in relation to digital media and the entertainment segment, said the company. The firm’s quarterly operating profit was also down 25% to about US$8 million.

The number of annual active consumers within the Chinese firm’s ecosystem grew to about 1.28 billion users – an increase of about 43 million from the September quarter.

“With confidence in the company’s prospects today and over the long term, we repurchased approximately 10.1 million of our ADSs (American depositary shares) for approximately US$1.4 billion this quarter,” said Maggie Wu, Alibaba’s CFO. The company stressed on its goal to be carbon neutral in its operations by 2030 and committed to an additional 1.5 gigatons of decarbonization by 2035.

Fintech behemoth Ant Group’s profit grew to US$2.7 billion in the quarter ended September 2021, up 24% from a year earlier. Notably, Ant reports its earnings one quarter behind Alibaba, which owns a one-third stake in the Alipay owner.

The ecommerce major has faced regulatory heat since its founder, Jack Ma, criticized China’s financial system in October 2020.

See also: Alibaba’s financial health in 5 charts

The company just recently shelved talks with investors to raise US$1 billion for Lazada’s pre-IPO round following a disagreement over the Southeast Asian firm’s valuation.

Update (Feb. 24, 11:45 p.m. SGT): This article was updated to include a statement from Alibaba on the reason behind the fall in its net profit.