Yesterday, an announcement came from Mercado Libre, stating that they had witnessed a doubling in their profits in the year 2023. However, the results of the fourth quarter were not as expected by the market, causing a 12% sharp decline in the shares of Marcos Galperín’s company on Wall Street on Friday.
In New York, Mercado Libre’s American Depository Receipts (ADR) are leading the downward trend among Argentine stocks. However, most stocks are also displaying a negative trend, albeit with less pronounced declines. The Edenor stock has dipped 3.2%, followed by IRSA and Telecom with dips of -2.5% and -2.1% respectively.
Argentine stocks have been on a downward trend after a number of days of positive performance, which also included bonds. Public bonds in dollars have decreased by approximately 1% today, despite an overall increase of 14% earlier this month.
Mercado Libre had announced yesterday that their earnings per share stood at US$19.64, resulting from a global turnover of US$ 14,473 million across the 18 countries where it operates. This marks an impressive 37.3% jump from 2022, and the best financial result in the company’s 19-year history.
Driven by its robust e-commerce and financial services operations, Mercado Libre managed to rake in a record net profit of US$987 million last year, which is a significant improvement of 104.7% compared to the results of the previous year.
According to the report of results presented by the company, the last quarter of the year saw a net profit of US$ 165 million, exactly the same as the corresponding period in 2022.
Investors were disappointed by this piece of information as they were expecting a better result for the period, which resulted in the company’s shares falling by 12% on Wall Street today.
Despite this, the company still celebrates the results of the balance sheet. The year 2023 is considered a remarkable year by MercadoLibre, not only due to the impressive growth rates, market share gains, and margin expansion, but also as a proof that their long-term strategy is yielding positive results, as stated in a company announcement.
The reason why higher sales in the fourth quarter did not translate into a higher net profit is the impact of two extraordinary tax provisions in Brazil, amounting to US$ 351 million. Nevertheless, the company assured that these provisions will not have a significant impact in the future.
Mercado Pago, the financial services division of the company, saw a rise in revenue by 34%, driven by an acceleration in lending activities.
Regarding its customer base, MercadoLibre witnessed a growth to 218 million unique active users, a significant jump from 148 million at the end of 2022.
