By Andre Romani
SAO PAULO (Reuters) – Latin American e-commerce giant MercadoLibre posted on Thursday a better-than-expected quarterly net profit, up nearly four-fold from the same period a year earlier, sending its shares up more than 12% in after-hours trading.
MercadoLibre, Latin America’s largest company by market value, said its net income for the October to December quarter came in at $639 million, rising 287% year-on-year and well above the $401.5 million expected by analysts in a LSEG poll.
Chief Financial Officer Martin de los Santos told Reuters the results came from lower funding costs, improved logistics efficiency, particularly in Mexico, as well as lower losses with currency, especially in Argentina.
MercadoLibre’s net revenue came in at $6.1 billion, up 37% year-on-year and above estimates of $5.9 billion, with sales measured by gross merchandise volume (GMV) rising 8% year-on-year, driven by 32% growth in its main market Brazil on a foreign exchange-neutral basis.
New York-listed shares in MercadoLibre jumped near 13% in post-market trade to about $2,380 each following the results.
MercadoLibre’s shares had fallen after the previous quarterly miss in November, with analysts citing higher logistic investments and credit ramp-up.
“Margins for a company that don’t go in a straight line are sometimes hard to predict from the outside,” de los Santos said on Thursday.
“We are trying to convey to the market that we will not shy away from investing in growth opportunities,” he added, noting management believes this will make the firm able to dilute fixed costs in the long term and continue being profitable.
Its earnings before interest and taxes (EBIT) came in at $820 million in the quarter ended in December, also above analysts’ expectations of $612 million and up 144% from a year earlier, as a tax hit in the fourth quarter of 2023 helped to expand profit growth in percentage terms.
Its credit portfolio also kept rising, reaching $6.6 billion from $6 billion in September, while its 90-day-plus default ratio fell to 17.5% from 17.9% in the period.
(Reporting by Andre Romani; Editing by Aida Pelaez-Fernandez and Kylie Madry)
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