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Rocket Internet prepares for profit from start-ups by year-end
May 31, 2017 / 6:45 AM / 6 months ago

Rocket Internet prepares for profit from start-ups by year-end

BERLIN (Reuters) - Rocket Internet (RKET.DE) said three of its leading start-ups were on track to make a profit by the end of the year as the German e-commerce investor reported lower quarterly losses.

FILE PHOTO: Oliver Samwer, CEO of Rocket Internet, attends the Annual General Meeting of Rocket Internet SE in Berlin, Germany, June 9, 2016. REUTERS/Axel Schmidt

Founded in Berlin in 2007, Rocket has built up and invested in dozens of businesses from fashion e-commerce to food delivery, including brands such as Delivery Hero and Global Fashion Group.

Rocket’s Chief Executive Oliver Samwer did not name the start-ups during a media call on Wednesday following results from the group’s leading holdings. Rocket said it remained well funded with 1.5 billion euros ($1.68 billion)of cash.

And Samwer declined to comment on possible flotations after Reuters reported that online food takeaway firm Delivery Hero is set to float before the summer break, while meal kit company HelloFresh could follow in the autumn.

Rocket’s share price has tumbled in the last year as losses mounted and it was forced to slash valuations for key start-ups.

However, the stock has recovered some ground in recent weeks on hopes for imminent listings as well as news that Emaar Malls EMAA.DU will buy a 51 percent stake in its Middle East fashion site Namshi. The shares were down 4 percent at 0821 GMT.

Aggregate revenue rose 28 percent to 617 million euros ($689.44 million) in the first quarter, while the adjusted loss before interest, taxation, depreciation and amortization was 100 million euros, down from 120 million a year ago.

HelloFresh saw sales growth slow to 45 percent from the 96 percent rate it recorded in 2016, while its adjusted EBITDA loss rose slightly to 29.6 million euros from 27.3 million.

Meanwhile, Rocket’s furniture websites, Westwing and Home24, both narrowed losses, with adjusted EBITDA losses of 3.6 million and 7.4 million, respectively.

The Jumia e-commerce business in Africa saw sales continue to fall due to currencies tumbling in Nigeria and Egypt, but its gross merchandise value - which measures the value of goods traded on its sites - rose by a third in constant currencies.

Reporting by Emma Thomasson; Editing by Edward Taylor and Alexander Smith

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