Net loss ain’t no thang for Sea Group

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When I first started following basketball and the NBA back in 2009, it was simple to work out which players had left the biggest impact on a game. Carmelo Anthony scored 30 points, that meant he had a good game, right? But then you look at the advanced stats, and you realize he got to that total by taking difficult, inefficient shots which ultimately meant that his team performed suboptimally. He probably missed a bunch of those shots since they were tough ones to make – in that sense, he hurt his team with his poor shot selection.

All of which is to say: Surface numbers don’t tell the whole story. And that’s the case with Sea Group’s latest financial numbers. While the firm’s net loss continues to widen, its other figures and the context behind them paint a rosier picture for the tech giant’s future.

Today we look at,

• Diving into Sea Group’s latest figures and what they really mean
• An Indonesian remittance startup closes its seed round
• Other newsy highlights such as Taiwan’s concern over semiconductor chip delays and a blockchain-focused multimedia platform raises US$1.7 million

P.S. Did you know that Tech in Asia’s next Pitch Night is coming on June 22? Registration for startups is closing this week, so act quick and sign up to get a pitching slot if you’d like to receive quality feedback from investors and prizes of up to US$5,000 in cash.

PREMIUM SUMMARY

When is a net loss not a net loss?

Whenever one looks at a company’s financial numbers, the surface figures are never enough. Net income and operating income are not the only metrics that matter, and that principle applies to Sea Group’s latest numbers.

• Ya, EBITDA: EBITDA stands for earnings before interest, taxes, depreciation, and amortization, and it reflects the performance of a company’s underlying business operations. While Sea Group’s overall operating income for 2020 was negative, it was profitable on an adjusted EBITDA basis – something it has repeated for four straight quarters.
• Trending in the right direction: In 2020, Sea Group generated US$556 million in cash from its operations while spending US$887 million on investing activities. While cash flow from operations remained insufficient to totally cover the funds used for investments, it did cover 63% of the amount, up from 19% the previous year.
• The big picture: While Shopee and Sea’s digital financial services are loss-making areas, a large chunk of their expenses are linked to long-term investments that may yet lead to big payoffs for Sea in the future.

Read more: Why you shouldn’t worry about Sea Group’s growing net loss

STARTUP SPOTLIGHT

An Indonesian cross-border remittance startup receives some money