E-commerce and financial company Rakuten reported a drop in profit and revenue in its third-quarter result announcement. The company also announced an uptick in revenues.
Rakuten reported a net loss of ¥14.8 billion for the nine months ended September 30, 2019. The loss was significantly lower than their net income at the same time last year, which was ¥107.7 billion.
The broker wrote off ¥111.2 billion for the ride-sharing company Lyft during the third quarter.
Lyft lost an equivalent of USD 246.1 million last quarter and lost about 40% of its value since last March.
Rakuten’s founder and Chief Executive Hiroshi Mikirani defended Lyft, claiming it was making a return for the e-commerce company.
The Japanese company posted ¥354 billion in segment revenue, including revenue from the retail brokerage. Meanwhile, segment profit was ¥50.9 million for the third quarter, fallen slightly by last year’s ¥51.9 million by 1.9%.
Its shares are up 45% this year but lost almost 20% since June.
The firm’s Tokyo-based securities services Rakuten Securities revenue and income both decreased from reduced commissions.
Rakuten Mobile Network Costs and Revenues
Rakuten recently started its own mobile business. Using cloud-based software rather than expensive hardware contributed to cutting the cost of building its network.
With 2.2 million subscribers, the e-commerce company’s mobile network grew from 1.9 million three months earlier. The company claimed over 98% of those who received a free trial offer activated the service.
Launching the mobile network and expanding its logistics infrastructure pushed the operating profit to ¥1.1 billion from ¥43.9 billion last year.
The mobile business contributed 30% ahead of last year’s revenue at ¥30.9 billion. Meanwhile, its operating loss widened to ¥14.5 billion from the last year’s ¥5.9 billion.
Construction delays led to a September descent when Rakuten gave no concrete date for its free service to 5,000 customers.
Rakuten plans to build 3,000 base stations by the end of 2019.