Coupang loses $1.5 billion in 2021, expects loss in 2022

Coupang office in Songpa District, southern Seoul [NEWS1]

Coupang reported a net loss of $1.54 billion in 2021, compared with a $463 million net loss a year earlier.

Net loss per share last year was $1.08, higher than Wall Street estimates of $0.82.

Coupang, founded in 2010, has never reported a profit and continues to lose money as it spends and invests to achieve growth in a highly competitive market. The earnings report released Wednesday after the market closed was the first full-year results for Coupang as a New York Stock Exchange-listed company.

Revenue last year was $18.4 billion, up 54 percent on year and matching the consensus compiled by Zacks Investment Research. Operating loss was $1.5 billion, compared to a $516 million loss the previous year.

On a quarterly basis, the e-commerce company reported a net loss of $405 million compared to a loss of $82.8 million a year earlier.

Revenue was $5.1 billion up 34 percent on year, but lower than Wall Street expectations of $5.18 billion. Revenue rose 9.82 percent on quarter.

The number of active customers rose 21 percent on year to 17.9 million, up 6.62 percent on quarter, compared to a 1.17 percent on-quarter decline in the third quarter and a 6.44 percent on-quarter rise in the first quarter.

Net revenue per active customer was $283, up 11 percent on year.

The company issued guidance for full-year 2022, forecasting an adjusted Ebitda loss of less than $400 million. In 2021, that number was a loss of $748 million, and in 2020, it was a negative $357 million.

On the earnings conference calls, the company said it expects adjusted Ebitda for its product commerce segment — e-commerce, grocery deliveries and advertising — will turn positive in fourth quarter this year, but losses from its growth initiatives — Coupang Eats, Coupang Play, fintech business and investments for international expansion — will keep Ebitda negative.

Delaware-incorporated Coupang Inc. owns Korea's Coupang Corp., the Coupang Play streaming service and Coupang Eats, a restaurant delivery service.

"Eats has been the fastest growing service in our history," said Kim Bom, founder and chief executive officer of the Delaware-incorporated company, during a conference call, "and it is growing to what we believe is the leader in the fast delivery category."

"The fast delivery model is what we believe will win the space, and it has in other markets that we studied. We're also excited about the growth potential that still remains. Last quarter, 70 percent of our active customers didn't place a single order on Eats. We believe that our culture of excellence will help build the right foundation for efficient and ultimately profitable growth there."

Coupang added that it is insured on property losses from the fulfillment center fire in June last year, but no insurance recoveries were recognized in the regulatory filling.

Coupang shares were sold in an initial public offering last year at $35.00 and opened on Mar. 11 at $63.50. Shares closed at $25.41 on Wednesday, down 60 percent from the debut price.

"For Coupang shares to be valued higher, the company needs to improve cash flow by enhancing profitability," said analyst Park Eun-kyung of Samsung Securities. "Although it is a bit early to determine if Coupang can achieve its 2022 earnings guidance, its market share is continuing to rise despite the competitive e-commerce market and first quarter earnings are expected to be more positive, with transaction costs rising over 30 percent."

BY LEE TAE-HEE [lee.taehee2@joongang.co.kr]