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Poland's Allegro Sees Q2 Profit Rising 13% To 16% At Home

By Reuters
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Poland's Allegro Sees Q2 Profit Rising 13% To 16% At Home

Poland's biggest e-commerce platform Allegro expects its core earnings to rise 13%-16% at home in the second quarter, after its March-quarter figure beat its expectations.

Allegro's adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 29.7% to 600.6 million zlotys (€133.2 million) in the key Polish market.

The company cited higher GMV (gross merchandise value) and take rates, strong growth in advertising revenues, and tight cost control as reasons for the beat.

Take rate, or fees it charges sellers on its platform, in Poland grew by 0.57 percentage points to 11.02% in the quarter, while advertising revenue grew 48%, Allegro said.

Keeping Costs Down

Allegro is concentrating on keeping costs down as it integrates Czech online retailer Mall, which it bought last year, and adapts to consumers spending less.

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"Our focus on growth and cost discipline is starting to deliver benefits," CEO Roy Perticucci said in a statement.

The company has been gradually hiking rates for sellers on its platform to share delivery costs under its Smart! subscription programme.

In November, Allegro for the first time hiked the fee for Smart! by 22%, mirroring similar moves by in Europe and the United States earlier that year.

It also made changes to the minimum value of shopping basket for buyers.

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Perticucci added the company saw no negative effects on the churn rate or customers' spend from the moves.

Allegro expects its GMV growth in the second quarter in Poland at 11-12%, with revenue seen rising 16-18%.

On a consolidated level, which includes the Mall business, Allegro sees GMV rising 10-11% and adjusted EBITDA 3-8%.

Read More: Top 10 Supermarket Retail Chains In Poland

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