Allegro (ALEP.WA), the largest e-commerce platform in Poland, announced on Thursday that it anticipates losses in its foreign division in the fourth quarter. As a result, the price of the company’s shares dropped significantly.
As of 1005 GMT, Allegro’s share price has fallen by 7.5%.
The firm has stated that it anticipates a rise in domestic earnings during the fourth quarter, which includes the busiest shopping period of the year (Christmas), and that it has successfully defended its position in the home market against competitors such as Amazon (AMZN.O.), which began operations in Poland in 2021.
According to the opinions of industry analysts, the sell-off was brought on primarily by dissatisfaction in the worldwide market, which Allegro is working to develop.
The company predicted that Poland’s fourth-quarter adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) would rise by 20%–23% year over year.
However, the business anticipates an adjusted EBITDA loss in its international division of between 160 and 180 million zlotys ($39.61 million and $44.56 million), taking into account its ambitions to begin operations in Croatia, Hungary, Slovakia, and Slovenia in the next year.
Trigon brokerage analysts noted in a note that the cost of the launches and the remaining considerable investment in expanding the platform in the Czech Republic, where Allegro began this year, might result in a loss that approaches around 400 million zlotys in 2024.
According to Allegro’s CFO, Jon Eastick, the company will resume investing to achieve profitable growth in the upcoming quarters. He described this year’s anticipated consolidated capital expenditure as “a low point,” which was somewhere between 450 and 480 million zlotys.
Gross merchandise value, or GMV, is a term that is used in the retail business to assess transaction volumes. During the third quarter, GMV in Poland increased by 10.5% to 13.3 billion zlotys, and the firm has stated that it anticipates growth of 9%–11% during the fourth quarter.
