Rocket Internet says making progress to limit losses

Reuters News
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Posted: Apr 14, 2016 2:10 AM

BERLIN (Reuters) - German ecommerce firm Rocket Internet said it was on track to make three of its start-ups profitable by the end of 2017 as it reported revenue rose 69 percent in 2015 to 2.4 billion euros ($2.70 billion).

While all of its start-ups are still loss-making, Rocket said it saw an improvement in their adjusted earnings before interest, tax, depreciation and amortization (EBITDA) margin of an average 6 percentage points in 2015.

It reiterated that 2015 should represent the peak of the losses of its major start-ups and repeated a target that three of those firms should be profitable by the end of 2017.

Founded in Berlin by brothers Oliver, Alexander and Marc Samwer in 2007, Rocket has set up dozens of ecommerce sites, aiming to replicate the success of Amazon and Alibaba in new markets in Africa, Latin America and Russia.

Rocket Internet has seen its stock sag since it listed in Frankfurt in October 2014 on investor concern that all its leading start-ups are still making heavy losses.

But it was buoyed this week by news it has sold a stake in one of those making the heaviest losses - Southeast Asian online retailer Lazada Group - to Alibaba.

Among its 14 biggest start-ups, Rocket Internet highlighted Middle East online fashion site Namshi and home furnishings retailer Westwing as making big strides toward profitability.

It also noted strong revenue growth at "ready to cook" meal delivery firm HelloFresh, seen as a likely candidate for a possible stock market listing, as well as at African online retailer Jumia, up 338 percent and 118 percent respectively.

It added that it had a cash balance of 1.8 billion euros at the end of 2015 and access to co-investment capital from a fund it set up in January, which it said now had commitments of $742 million, up from a previous $420 million.

(Reporting by Emma Thomasson; Editing by Victoria Bryan)