Losses due to fine
Alibaba reported stronger revenues and number of active users in the March quarter than Wall Street expected, but posted its first loss in nine years because of a major antitrust fine.
Shares in Chinese e-commerce giant Alibaba, down 24.3% in the past six months, fell 3.2% in early trading on Thursday after the company released its report for the fourth quarter of fiscal 2021, which ended in March.
The good news for Alibaba investors was a 64% increase in quarterly revenue from a year ago to ¥187.39 billion, or $28.6 billion, above analysts' estimates of ¥180.41 billion.
The number of active consumers on Alibaba's marketplaces in China (customers who have placed at least 1 order in the past year) rose 32 million to 811 million in the 12 months ended March 31.
For the full fiscal year 2021, Alibaba's total revenues rose 41% to $109.48 billion and net income rose 30% to $26.25 billion.
In its press release, Alibaba said it was able to achieve this growth due to the strength of the consumer economy in China and the acceleration of digitalisation in all areas of life.
Alibaba's forecast for the current fiscal year 2022 is for revenue growth of 30% to 930 billion yuan.
The negative signal for the fourth quarter of 2021 in Alibaba's report was a slowdown in revenue growth of its cloud computing business to 37% compared to the same period last year of $2.6 billion. This was due to the loss of its largest customer, which Alibaba did not name.
For all of FY2021, the Chinese market leader's cloud computing revenue rose 50%.
Alibaba's report marked its first quarterly loss in nine years due to a hefty $2.75 billion antitrust fine. Contrary to Wall Street's expectations of a 6.95 billion yuan profit, the company posted a loss of 5.47 billion yuan. Alibaba's growth in electronic sales in calendar year 2020 amid a pandemic was overshadowed by China's new antitrust laws, which came into force in November last year. In the same month, the record IPO of Ant Group, a 33% stake in Alibaba, was suspended by Chinese authorities.
The fall in Alibaba's shares in 2021 was largely due to the entry into force in the US of a law that makes Chinese technology companies subject to delisting if they are not allowed to be audited within three years.