German e-commerce investor Rocket Internet has posted a crash loss of 617 million Euros ($691 million) in the first-half 2016. This after heavy write-downs on companies in its portfolio, reviving concerns about the value of its investments.
Shares of Rocket lost as much as 12 per cent before recovering somewhat to a 9 per cent drop to Euros 17.16 in Frankfurt. Global Fashion Group – a collection of apparel e-commerce sites in Asia, Africa, South America and Australia – in which Rocket is heavily invested, dragged down first-half earnings by Euros 383 million, the Berlin-based company said in a statement last week.
Rocket has spent heavily to build up assets like Global Fashion Group, which includes online fashion businesses Zalora in southeast Asia, Dafiti in Latin America and Lamoda in Russia, with a view to lining up a succession of lucrative stock market flotations.
Yet its plans have been dogged by write-downs on those assets and it has not set out any timescale for possible flotations.
Chief executive Oliver Samwer said the group remained committed to its goals of placing broad bets to create a few proven winners in which it can continue to invest, in the hope of big paydays from eventual stock market sell-offs.
“We still expect at least three of our selected portfolio companies to turn profitable by the end of 2017, and that the aggregate EBITDA losses of the selected portfolio companies will have peaked in 2015,” Samwer said in a statement.
Announcing its first-half results late on Thursday, Rocket said its first-half loss was mainly down to a 383 million euro writedown on Global Fashion Group, in which Sweden’s Kinnevik is a co-investor, as already announced in April.
Yet it also took other writedowns on asset impairments and fair-value adjustments for unspecified other investments. The company did not provide specifics in its statement and was not immediately available for further comment.