Alibaba.com Ltd. stated that its first-quarter net profit fell 25% as slowing economic growth and a shift in the company’s business model led to a decline in membership.
Alibaba started to see a softening of financial performance in the first quarter of 2012, which reflected the lower earnings visibility which the company cautioned about in relation to the business model upgrade as well as the strategic shift to focus on the quality of its marketplaces and buyer experience.
Total GAAP revenue in the first quarter of 2012 was RMB1.59 billion. This represented growth of 3.7% year-over-year but a decrease of 4.2% quarter-over-quarter. As of March 31, 2012, deferred revenue and customer advances slightly increased 1.8% year-on-year to RMB4.3 billion while profit attributable to equity owners was down 25.0% year-on-year to RMB339.2 million. Recurring free cash flow (non-GAAP) was RMB19.2 million.
On February 21, 2012, Alibaba Group and Alibaba.com jointly announced the proposed privatization of Alibaba.com. Further details will be provided in the Scheme Document, which will be dispatched to shareholders on April 24, 2012.
Source: Alibaba Earnings Release
