May 5 (Reuters) - MercadoLibre Inc posted a larger
quarterly loss on Wednesday, hit by a higher tax bill and weak
margins, as the Argentine e-commerce giant boosts spending to
respond to a surge in online shopping and digital payments in
The company has been increasing investment in key areas
including warehouses and fintech services as it battles
competitors such as Amazon.com Inc in a rapidly growing
market where many shoppers are still unaccustomed to spending
Its income tax expense swelled to $43.5 million in the first
quarter ended March 31, from $4.4 million a year earlier, while
its gross profit margin shrunk by about 5% to 42.9%.
Its net loss widened more than 61% to $34 million, or 68
cents per share, from a year earlier. Excluding income tax
expenses, the company posted a net income of $9.5 million. (https://bit.ly/3vNgIps)
As a company operating out of Argentina, MercadoLibre also
incurred foreign currency losses worth $15.1 million due to
additional costs for buying U.S. dollars following restrictions
imposed by Argentina's government.
But its quarterly revenue more than doubled to $1.4 billion,
beating a Refinitiv IBES estimate of $1.14 billion.
The second wave of COVID-19 that has hammered Brazil, which
comprised 56% of MercadoLibre's total revenue, has sustained a
surge in online shopping and digital payments in the region and
neighboring countries including Argentina.
Total payment volume from its fintech arm Mercado Pago rose
81.8% to $14.7 billion, as the company revs up its digital
payments engine with many shops shifting online during the
MercadoLibre, whose shares fell 1.3% in extended trading,
said it had purchased $7.8 million of bitcoin.
(Reporting by Chavi Mehta in Bengaluru and Aluisio Alves in Sao
Paulo; Editing by Christian Plumb and Aditya Soni)