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Alibaba Group’s Revenue Surged to $22.7bn in Q2 2020, Still Four Times Less Than Amazon

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Alibaba Revenue Rose to $22.7bn in the Second Quarter 2020

While many Chinese companies have faced severe challenges and losses caused by the coronavirus outbreak, Alibaba Group is emerging as one of the country’s biggest corporate winners of the COVID-19 crisis. The multinational tech giant gained the opportunity to expand its business during the first half of 2020, as demand for its services and online marketplace traffic surged amid the coronavirus lockdown.

According to data presented by StockApps.com, the Alibaba Group’s revenue jumped to $22.7bn in the second quarter of 2020, still four times less than its leading competitor Amazon.

Alibaba Quarterly Revenue Jumped 34% YoY, Amazon’s 40%

Alibaba Group emerged as China’s leading eCommerce company after the 2003 SARS outbreak. Since then, it has become a significant hirer and a lender, providing more than 100,000 jobs and offering billions of dollars in loans to SMEs.

One of the group’s most profitable marketplaces is Taobao, responsible for more than 80% of its sales. Unlike Amazon, Alibaba isn’t involved in direct sales and doesn’t own warehouses; it simply helps branded manufacturers and small businesses to reach consumers. Although both tech giants have established a strong presence in their domestic markets, there is intense competition between them in expanding to the new markets.

Alibaba’s revenue amounted to $11.9bn in the second quarter of 2018, while its US competitor reported $52.8bn, four times more than that. During the next twelve months, Alibaba`s revenues surged by 41% to almost $17bn in the second quarter of 2020. Amazon’s revenue rose by nearly 20% to $63.4bn in the same quarter. After a strong performance in the third and fourth quarter of 2019, the revenue of both companies slightly dropped in the first quarter of 2020. However, the second quarter of the year delivered the highest results, so far.

Alibaba Group’s revenue jumped to $22.7bn; an 34% increased year-over-year. The company’s Q2 Results also revealed the number of their annual active consumers on the China retail marketplaces surged by 16 million in three months, reaching a total of 742 million. Mobile MAUs on China retail marketplaces jumped to 874 million in June, an increase of 28 million compared to the first quarter. Adjusted EBITDA grew by 30% in a year to $7.2bn, while quarterly net income rose to more than $6.5bn.

In August, Amazon also announced its excellent second-quarter results, which revealed double-digit revenue growth year-over-year driven by a surge in sales amid the COVID-19 pandemic. The US tech giant’s revenue spiked 40% year-over-year to $88.9bn, up from $81.5bn expected. Net income surged by 100% to $5.2 bn, while earnings per share hit $10.30, a significant increase compared to $5.22 in the second quarter of 2019. The company reported its North American sales rose by 43% to $55.4bn, while international sales grew 38% to $22.7bn.

Combined Market Cap of Two Tech Giants Soared by 81% YoY

Besides their revenues and profits booming amid the coronavirus outbreak, both Alibaba Group and Amazon witnessed significant growth in their market capitalization since the beginning of the year.

In December 2019, the market cap of the Chinese tech giant amounted to $570.9bn, revealed the Yahoo Finance data. After a 10% drop in March, this figure rose to $581.2bn in June. Statistics show the Alibaba Group’s market cap continued growing in the third quarter, rising by $181.2bn after fantastic Q2 2020 results. In September, it surged to $762.4bn, a 75% jump year-over-year.

In 2020, Amazon officially became the fourth tech company to join the $1 trillion club, besides Apple, Microsoft, and Alphabet. Statistics show the company’s market cap amounted to $920.2bn in December last year. By the end of the first half of 2020, it rose to $1.38trn and continued growing ever since. Statistics show the combined value of Amazon’s stocks surged by $210bn after the US tech giant announced its last quarterly results and hit $1.59trn in September, an 80% increase year-over-year.

The combined market capitalization of the two competitors hit $2.35trn this month, almost 58% jump since the beginning of the year.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Finance

Flour Mills Posts Strong Half Year Results Despite Headwinds

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flour mills posts 184% increase in PAT

Flour Mills of Nigeria Plc recorded strong performance in the Half Year (H1) ended September 30, 2020.

In the 2020/21 half-year results released on Tuesday through the Nigerian Stock Exchange, the leading integrated food business and agro-allied Group, grew revenue by 31 percent year-on-year from N270.8 billion posted in the half-year of 2019/20 to N355.1 billion in the period under review with second-quarter growth of 47 percent when compared to last year second quarter.

Similarly, the Group’s profit before tax grew by 60 percent year-on-year from N8.6 billion in H1 2019/20 to N14.6 billion in H1 2020/21 with an impressive 160 percent growth from the second quarter.

The strong performance continues across the board as profit before tax was driven by the agro-allied segment, which realised a profit of N6.3 billion when compared to the loss posted in 2019/20 period. The company said it recorded strong improvement in edible oils and fats, protein and fertiliser businesses after its investments over the years started yielding results.

Profit after tax grew by 68 percent from N5.9 billion achieved in H1 2019/20 to N9.9 billion in the period under review.

According to the company, despite economic uncertainties and headwinds, the Group has continued to show sustained growth in key areas with the agro-allied unit leading with a strong result in edible oils and proteins.

Speaking on the performance, Paul Gbededo, the Managing Director and Chief Executive Officer (CEO) of the company, said “with this result, our business has once again shown its resilience, by following the path of sustainable growth despite the prevailing challenges in both the local and global economy.”

He further stated that “in line with our vision to continue to grow value for our investors, Management will for the remaining part of the financial year continue to concentrate on improving operational effectiveness through accelerated strategies for Group-wide cost optimisation, which will ensure sustainability in the current market climate, while we will continue to invest in growing the business further.”

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US Banks Led the Most Fined Financial Institutions in 2020

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US Banks Are The Most Penalised Financial Institutions in 2020 Financial Year

Banks in the United States were the most fined financial institutions in 2020, according to the latest report from Finbold.

Finbold, a company that specialises in financial data, said three countries accounted for 97.32 percent of the total fines levied on banks in 2020.

The data revealed that United States banks are the most fined at €9.15 billion. This was followed by Australian banks with a combined €770 million, while banks in Israel came third with €762.97 million.

Also, while the fines are likely to increase before the end of the year, the total fines levied against financial institutions globally stood at €11.61 billion as of October 22nd.

Further breakdown showed Swedish banks came fourth with €456.18 million fines while German banks that incurred a combined €169.01 million fines came fifth.

The report showed Goldman Sachs led the most fined bank with €5.26 billion for various violations of regulatory rules.

Wells Fargo came second with €2.53 billion while Westpac Bank in Australia and Hapoalim emerged third and fourth with €770 million and €762.97 million, respectively.

Other heavily fined lenders include Swedbank from Sweden fined €360 million and Germany’s Deutsche with €126.52 million fine in 2020 so far.

Speaking on banks’ fines, Oliver Scott, Chief Editor, Finbold, said “Notably, the tally of bank fines is likely to increase in the coming years as European and Asian regulators catch up with U.S peers who are considered more aggressive. However, banks are looking for means of minimizing fines. Analysts have been of the opinion that the fines could have been avoided if banks leverage technology through the deployment of perfect software.”

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Guinness Nigeria Explains Reason for N12.6 Billion Loss in 2020

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Guinness Nigeria Speaks on 2020 Poor Performance

Guinness Nigeria Plc has blamed the challenging business environment amid COVID-19 restrictions that led to the closure of bars, clubs, lounges and restaurants for its 2020 losses.

Mr. Baker Magunda, Managing Director/CEO, Guinness Nigeria, who spoke on the company’s performance in 2020, said the aforementioned represents a major part of the company’s consumption, adding that restriction imposed on gathering impacted the usual demands for celebratory occasions.

He explained that demand was weighed upon by a decline in consumer income, rising unemployment rate due to the shutdown of large corporations, surged in VAT and excise throughout 2020.

According to him, distribution was affected by the ban imposed on inter-state travel despite collaborating with regulatory authorities to minimize the negative impact on the company.

Here is a breakdown of the Guinness Nigeria performance in 2020 Financial Year

Guinness profit plunged by a massive 129.1 percent to -N12.6 billion in the 2020 Financial Year (FY), down from the N5.5 billion profit achieved in 2019 (FY). While the company’s gross profit nosedive by 16.9 percent from N40.13 billion posted in 2019 to N33.33 billion in 2020.

The company decline was broad-based as revenue also declined from N131.5 billion filed in 2019 to N104.4 billion in the 2020 financial year.

Accordingly, administrative cost rose from N9.9 billion in the 2019 financial year to N14.3 billion in 2020. However, the cost of sales moderated by 22 percent from N91.4 billion posted in 2019 to N71.1 billion in 2020.

Finance cost expanded from N2.6 billion in 2019 to N4.5billion in 2020 while finance income declined to N301 million in the year under review, down from N750.9 million in 2019.

Mr. Baker Magunda, said “The last quarter performance of fiscal 2020 was significantly impacted by restrictions due to COVID-19, exacerbating the already challenging economic environment. Closures of on-trade premises (bars, lounges, clubs, and dine-in restaurants), which represents the major part of the consumption occasion for our products and bans on celebratory occasions, impacted sales.

“Demand was also impacted by reduced consumer income, unemployment concerns due to the shutdown of a large number of businesses, and increases of VAT and excise throughout the year.”

Speaking further Magunda said, “Distribution was impacted by the ban of inter-state, and in some cases intra-state travel. Although, Management worked diligently with regulatory authorities to minimize the impact, this hampered our distributors’ ability to restock and have our brands available for purchase.”

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