Less than a week before it will release its full result, Rocket Internet has released half year result for Global Fashion Group, GFG.
On the top line, Gross revenue increased from EUR353.8 million to EUR464.7 million for this year. However, GFG recorded a negative adjusted EBITDA EUR67.6 million. This is an improvement considering the fact that the company reported net loss of EUR120.5 million in 2015 half year.
As an indication that the company is aggressive driving out of a year on year loss, ‘Net Merchandise Value (NMV), which includes marketplace sales, increased by 53.2% on a constant currency basis to EUR 465 million.
The result also shows that its the gross margin increased to 42.2% and the Adjusted EBITDA margin improved substantially from (33.4)% in H1 2015 to (14.8)% in H1 2016.
The company said it made margin improvements were largely driven by improved inventory management on the Gross Margin side as well as meaningful efficiency gains across fulfilment and marketing operations, in addition to fixed cost optimisation as a result of GFG’s path-to-profit initiatives across all regions.
The company also announced Divestment of Jabong and non-core markets. This includes the sale of Jabong to Flipkart for USD70 million in cash in August. GFG also said its South-EastAsian business Zalora sold its operations in Thailand and Vietnam in April to retailer Central Group for an undisclosed amount.
GFG said completed transactions are a decisive step in GFG’s strategy to refocus on core markets and further accelerate the path to profitability.
Last week, Rocket Internet had announced that it will be reporting a net loss of EUR617 million for the first half of the year. In the statement released on the profit warning, Rocket Internet had attributed a substantial part of the loss to GFG.
GFG has under its management eCommece brands namely- including the regional businesses Lamoda, Dafiti, Namshi and Zalora & The Iconic. The company has sold off Jabong.
The full half year result for all its selected portfolio are expected to be released on the 22nd of next month. Jumia, its restructured eCommerce operations in Nigeria is expected to post improved earnings, however, the company will still report a loss for the first half year.
