Business Express is an online portal that covers the latest developments in the world of business and finance. From startups and entrepreneurship to mergers and acquisitions, Business Express provides reporting on the stories that matter most to business leaders and decision-makers.The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

Polish e-commerce firm Allegro eyes higher Q1 profit

By Anna Pruchnicka

(Reuters) -Poland’s biggest e-commerce platform Allegro said on Thursday it expects core earnings to rise in the first quarter, as it focuses on cost control amid continuing economic uncertainty.

Allegro is looking to keep costs down as it integrates the Mall Group business it bought last year and adapts to consumers spending less.

“There was what we call trading down starting to be more visible in the fourth quarter,” finance chief Jon Eastick said in an interview. “Category by category people are taking cheaper options because they know they need money for their energy bills and fuel cost.”

The company expects consumers to feel pressure this year, Eastick said.

Inflation around central Europe has surged in the past year, more than elsewhere in the continent, as food prices have jumped alongside energy costs. In Poland, Allegro’s largest market, inflation in February was 18.4% year on year, the highest in 26 years.

Allegro forecast its adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) to increase 20%-23% in its key Polish market.

Shares in the company were up 6.7% by 0748 GMT.

Gross merchandise value (GMV) — an industry metric used to measure transaction volumes — is expected to rise 13%-14%, while revenue is likely to increase 20%-22%, the company said.

Don't miss out on any breaking news or insightful opinions!
Subscribe to our free newsletter and stay updated on the go!


By submitting this form, you are consenting to receive marketing emails from: Global Banking and Finance Review, Alpha House, Greater London, SE1 1LB, https://www.globalbankingandfinance.com/. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Monthly GMV growth fluctuated between 12% and 15% for its Polish operations during the first quarter, the company said.

Allegro is also targeting lifting its margin in Poland back towards 5% mid-term, it said, which Eastick specified meant in two to five years. Adjusted EBITDA/GMV margin rose by 0.94 percentage points to 4.90% in the fourth quarter.

Under its “fit to grow” project Allegro plans to consolidate warehousing space and has made reductions in specific teams, including about 60 people in the technology team in the Czech Republic, Eastick said.

“We’re hiring for specific roles that need to be filled but generally speaking we are trying to control the number of people downwards, for example by not replacing people who leave,” Eastick said.

Allegro declined to comment on layoffs in the wider group. It had 7,840 employees at end 2022.

The company’s core earnings jumped 41.2% to 708 million zlotys ($163.70 million) in the fourth quarter in Poland, topping average analysts’ expectations of 692 million zlotys in a company-compiled consensus. Including Mall, the figure rose 33.3% to 668 million zlotys.

($1 = 4.3250 zlotys)

(Reporting by Anna Pruchnicka; Editing by Matt Scuffham, Uttaresh Venkateshwaran and Jacqueline Wong)

 

Recent Post: