Currencies

China capital curbs reflect buyer’s remorse over market reforms

Last year the reformist head of China’s central bank convinced his Communist party bosses to give market forces a bigger say in setting the renminbi’s daily “reference rate” against the US dollar. In return, Zhou Xiaochuan assured his more conservative party colleagues that the redback would finally secure coveted recognition as an official reserve currency […]

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Capital Markets

Mnuchin expected to be Trump’s Treasury secretary

Donald Trump has chosen Steven Mnuchin as his Treasury secretary, US media outlets reported on Tuesday, positioning the former Goldman Sachs banker to be the latest Wall Street veteran to receive a top administration post. Mr Mnuchin chairs both Dune Capital Management and Dune Entertainment Partners and has been a longtime business associate of Mr […]

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Banks

Financial system more vulnerable after Trump victory, says BoE

The US election outcome has “reinforced existing vulnerabilities” in the financial system, the Bank of England has warned, adding that the outlook for financial stability in the UK remains challenging. The BoE said on Wednesday that vulnerabilities that were already considered “elevated” have worsened since its last report on financial stability in July, in the […]

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Currencies

China stock market unfazed by falling renminbi

China’s renminbi slump has companies and individuals alike scrambling to move capital overseas, but it has not damped the enthusiasm of China’s equity investors. The Shanghai Composite, which tracks stocks on the mainland’s biggest exchange, has been gradually rising since May. That is the opposite of what happened in August 2015 after China’s surprise renminbi […]

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Financial

Hard-hit online lender CAN Capital makes executive changes

The biggest online lender to small businesses in the US has pulled down the shutters and put its top managers on a leave of absence, in the latest blow to an industry grappling with mounting fears over credit quality. Atlanta-based CAN Capital said on Tuesday that it had replaced a trio of senior executives, after […]

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Categorized | Financial

Rocket losses narrow at main companies


Posted on September 22, 2016

The logo of of Rocket Internet, a German venture capital group is pictured in illustration photo in Sarajevo...The logo of of Rocket Internet, a German venture capital group is pictured in this September 24, 2014 illustration photo in Sarajevo. Shares in Rocket Internet, the global e-commerce investor, dropped 14 percent in their debut on the Frankfurt stock exchange on Thursday. REUTERS/Dado Ruvic/Files (BOSNIA AND HERZEGOVINA - Tags: BUSINESS TELECOMS)©Reuters

Shares in Rocket Internet, the German investor in tech start-ups, rose more than 10 per cent on Thursday, after losses at the main companies in its portfolio narrowed and it repeated a pledge that at least three of them would turn profitable by the end of 2017.

The first-half results were a rare piece of good news for a company whose shares have slumped since its flotation in 2014, amid investor concerns about mounting losses and doubts about the way it values its start-ups.

    Earlier this month, Rocket had warned of a loss of €617m in the first half, up from a loss of €45.9m a year earlier. That reflected an earlier reduction in the valuation of Global Fashion Group, one of its ecommerce companies, by two-thirds to €1bn following a funding round. Also this month, it cut the valuation of retailer Home24 from €980m to €420m following a €20m funding round.

    But chief financial officer Peter Kimpel told reporters on Thursday: “We’re very well progressing on our path to profitability.”

    Rocket said the aggregate-adjusted margin of earnings before interest, taxes, depreciation and amortisation was minus 17 per cent in the first half, compared with minus 32 per cent a year ago. It said net revenues had risen 32 per cent to €1bn.

    Margins improved at most of its companies, including Russian online fashion group Lamoda and online home furnishings retailer Westwing. Middle Eastern fashion retailer Namshi turned profitable in terms of adjusted ebitda — the only one of Rocket’s big investments to do so.

    Rocket shares were 10.5 per cent higher at €21.29 in midday trading in Frankfurt on the news.

    However, the picture was not entirely rosy, with food delivery start-up HelloFresh, which shelved an initial public offering last year, seeing ebitda losses swell to €45.7m in the first half, more than double its losses a year earlier. Mr Kimpel attributed that to a big rollout of its business in the US.

    He maintained a pledge that aggregate ebitda losses of the main companies in the portfolio would have peaked in 2015, and that at least three of the start-ups would turn profitable by the end of 2017.

    Formed in 2007 by the Samwer brothers Oliver, Alexander and Marc, Rocket has evolved into the backbone of Berlin’s thriving start-up scene and one of Europe’s most valuable tech companies. Businesses it has created or invested in span an ecommerce spectrum from food delivery to home furnishings and fashion.