Challenging times ahead for Ninja Van as losses spike and growth slows

Ninja Van, the Singapore-based logistics company, has revealed year-on-year losses that more than doubled for the year ending June 2022. This was due to slowing revenue growth that failed to keep pace with its rising cost of sales and administrative expenses.

Revenue growth for FY 2022 declined markedly from FY 2021’s 95% to 21%. Comparatively, the cost of sales and administrative expenses increased by 44% and 29%, respectively, over the same period.

As a result, the company’s loss before tax widened from US$74 million in FY 2021 to US$187 million in FY 2022.

During the same period, Ninja Van’s gross profit margin declined from 62% to 54%, although this is still higher than the 50% recorded in FY 2020.

See also: GogoX and Delhivery: A tale of two logistics IPOs

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What accounts for the slowdown in revenue growth?

Logistics companies like Ninja Van rode an ecommerce boom during the Covid-19 pandemic, although that has since tapered off.

Lai Chang Wen, co-founder and CEO of Ninja Van Group, acknowledges as much. “Post-pandemic, we’ve seen that growth momentum carry forward but at a slower pace”, he tells Tech in Asia. He adds that the company has insights on which segments of its business it expects to see continued growth and where it should be investing resources, but did not share specifics.

Ninja Van co-founder and CEO Lai Chang Wen / Photo credit: Patrice Maurein / Ninja Van

However, the firm’s travails may not be purely related to the macro picture.

As ecommerce platforms like Shopee – a key client for Ninja Van – seek to demonstrate profitability, one of the levers they are pulling is to squeeze costs for third-party logistics (3PL) firms such as Ninja Van.

See also: What Shopee’s breakup with Ninja Van, QuadX in the Philippines means for 3PL firms

Investment in fixed-income fund

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