Alibaba, China’s e-commerce and entertainment giant, announced net profits of $10.6 billion for its financial year to the end of March, a year-on-year increase of 39%. The rebound was achieved on revenues of $126 billion that were up by just 2%.
Using the group’s preferred non-GAAP measure to exclude extraordinary items, net income rose by a smaller 4%, but weighed in at over $20 billion.
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The importance of the overall figures has been rendered moot by Alibaba’s end of March announcement that it plans to transform itself from an operating company into a holding company, by allowing each of its six divisions to go their own way.
“[The] board has approved the process to start external financing for Alibaba International Digital Commerce Business Group; exploration of an IPO for Cainiao Smart Logistics Group; and execution of an IPO for Freshippo,” the company said on Thursday.
Alibaba has media and entertainment operations and holdings that include China’s number three long-form video streaming platform Youku, one of the country’s two largest cinema ticketing agencies (Taopiaopiao), a web browser, ownership of the South China Morning Post newspaper in Hong Kong and various holdings in cinema operators and film production companies. While the group currently lists these as digital media and entertainment activities, only some of them are currently contained within the Hong Kong-listed public company Alibaba Pictures.
Over the April 2022 to March 2023 period, revenue from digital media and entertainment weighed in at RMB31.5 billion ($4.58 billion), a decrease of 2%. Adjusted earnings before interest, taxation and amortization (EBITA) came in as a smaller loss.
It recorded an EBITA loss of RMB1.87 billion ($273 million), compared to a loss of RMB4.69 billion in fiscal year 2022, “primarily due to the narrowing of loss from Youku driven by disciplined investment in content and production capability.”
For the three month ending March 31, 2023, Youku’s total subscription revenue grew 13% year-over-year, primarily driven by increasing average revenue per user. The company does not disclose subscriber numbers. It also credited “high-quality original content such as ‘Who Is He’ and ‘The Blood of Youth’.”
Alibaba said that demand for offline ticketing services normalized since the end of COVID restrictions, resulting in strong growth in businesses such as Damai and Taopiaopiao.
The group confirmed that in future digital media and entertainment will be headed by Fan Luyuan (chairman and CEO), Maggie Wei Wu, director (director, Alibaba Group), Judy Wenhong Tong, director (partner, Alibaba Partnership), Sara Siying Yu, director (group general counsel) and Winnie Jia Wen, director (president, group public affairs).
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