Coupang-logs-positive-EBITA-margin
Shown above is the head office of Coupang in Seoul. The firm achieved a positive EBITA margin during the second quarter for the first time in eight years. Photo courtesy of Coupang

Korean online retailer strives to turn a profit

South Korea’s e-commerce giant Coupang announced on Aug. 11 that it had achieved a positive EBITA margin during the second quarter of this year for the first time since 2014.

The company, which went public early last year in New York, said that its adjusted EBITA margin amounted to $66 million during the three-month period.

EBITA is a measure of a corporation’s profitability, which is designed to show earnings before interest, taxes, depreciation, and amortization.

In other words, a positive EBITA margin means that a specific outfit is profitable at the operating level.

But overall, Coupang failed to turn a profit during the April-June period as it netted $67 million in loss, down 87 percent from a year before.

Its second-quarter revenue amounted to $50 billion, up 12 percent year-on-year.

“Customers turn to us for amazing experiences, faster delivery, and lower prices, and we’re determined to wow them every day,” Coupang CEO Bom Kim said.

“We increased our investment to a record $500 million in Q2 alone in exclusive discounts, free Rocket deliveries, and free Coupang Play video content for our WOW members.”

Coupang CFO Gaurav Anand pointed out that a positive EBITA margin is a great feat.

“We’re pleased to report that we achieved positive adjusted EBITDA on a consolidated basis, generating $66 million across the entire business, improving $157 million from the prior quarter. Over the past two quarters, we’ve driven a total improvement of over $350 million, a reflection of our continued execution across the company,” he said.

“At the beginning of the year, we provided guidance of total company adjusted EBITDA losses below $400 million for 2022. We are now raising that guidance to achieve positive adjusted EBITDA for the full year.”

Observers expected that Coupang might be able to turn a profit in the near future.

“Coupang is faring really well compared to guidance, which it gave earlier this year. Its profitability has been substantially improved,” Hana Financial Investment analyst Park Jong-dae said.

“It may be able to increase its market power and gain momentum to enter the era of recouping its investment.”

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The publisher studied Korean history in Seoul and management of business administration in the United Kingdom. He has 20-year experiences in the media business. Kim can be reached at voc200@gmail.com or 82-2-6956-6698.