Coupang, Inc. posts nearly 1.2 trillion won operating loss in first half as fine drives record deficit

[Financial News] Coupang, Inc., the parent company of Coupang, reported revenue of more than 13 trillion won in the second quarter of this year, but posted an operating loss of more than 800 billion won, swinging to a deficit from a year earlier. The company’s operating loss and net loss widened sharply after a fine in the 600 billion won range related to a personal data breach incident was reflected in selling, general and administrative expenses.■ Second-quarter operating loss of 835 billion won after fine is bookedAccording to Coupang, Inc.’s consolidated earnings report submitted to the United States Securities and Exchange Commission (SEC) on the 5th, second-quarter revenue came to $8.856 billion, up 4% from $8.524 billion a year earlier. Using the average won–dollar exchange rate of 1,501.89 won for the second quarter, revenue amounted to 13.3007 trillion won, up from 11.9763 trillion won a year earlier. On a constant-currency basis, revenue growth was 10%. First-quarter revenue this year was $8.504 billion, or 12.4597 trillion won, up 8% on a constant-currency basis.
While top-line growth continued, profitability deteriorated sharply. The second-quarter operating loss was $556 million, or about 835 billion won, reversing from an operating profit of $149 million, or 209.3 billion won, in the same period last year. The company also posted an operating loss of $242 million, or 354.5 billion won, in the first quarter, marking two straight quarters of operating losses.
Net loss for the second quarter was $570 million, or about 856 billion won. In the second quarter of last year, the company posted net income of $31 million, or 43.5 billion won. After a net loss of 389.7 billion won in the first quarter, this marked a second consecutive quarter of net losses. Earnings per share (EPS) came to $0.32.
The second-quarter operating loss and net loss included about $410 million in fines related to the personal data breach incident. Coupang, Inc. said that excluding the fine, second-quarter operating loss and net loss would have been $146 million, or about 219.2 billion won, and $160 million, or about 240.3 billion won, respectively.
Earlier, the Personal Information Protection Commission (PIPC) announced in June that it would impose a fine of 624.681 billion won and a penalty of 16.8 million won on Coupang over the personal data breach incident. Coupang, Inc. later disclosed to the SEC that the estimated fine of about $410 million would be reflected in second-quarter selling, general and administrative expenses (OG&A).
As a result of the fine, second-quarter selling, general and administrative expenses rose 26% from a year earlier to $3.05 billion. Total operating expenses reached $9.412 billion, exceeding revenue. Adjusted EBITDA, or Earnings Before Interest, Taxes, Depreciation, and Amortization, fell 62% year over year to $163 million from $428 million.■ Active customers rise, growth business revenue up 24%Revenue in the core product commerce segment, measured in dollars, came to $7.425 billion, up 1% from $7.334 billion a year earlier. In won terms, revenue was 11.1515 trillion won, up 8% on a constant-currency basis from 10.3044 trillion won a year earlier. First-quarter product commerce revenue this year was $7.176 billion, or 10.5139 trillion won, up 5% on a constant-currency basis.
Adjusted EBITDA for the product commerce segment fell 42% year over year to $382 million, or about 573.7 billion won, from $663 million.
Active customers in product commerce rose 3% year over year to 24.7 million from 23.9 million. That was also an increase of 800,000 from 23.9 million in the first quarter. Revenue per customer was $301, or about 452,060 won. That was down 2% in dollar terms from $307, or 431,340 won, a year earlier, but up 5% on a constant-currency basis.
Revenue in the growth business segment, which includes Taiwan Rocket Delivery, Farfetch, and Coupang Eats, rose 20% year over year to $1.431 billion, or about 2.1492 trillion won, from $1.19 billion, or 1.6719 trillion won. On a constant-currency basis, growth was 24%. Adjusted EBITDA loss in the growth business segment narrowed 7% year over year to $219 million, or about 328.9 billion won, from $235 million.
Cash generation weakened. Operating cash flow over the trailing 12 months was $1.4 billion, down $484 million from a year earlier. Free cash flow came to $105 million, down $679 million over the same period. Free cash flow in the second quarter fell 79% year over year to $51 million from $247 million.
Coupang, Inc. said it repurchased 23.2 million Class A common stock for $459 million during the second quarter. Earlier, when it announced first-quarter results, the company had approved a $1 billion share repurchase program as part of its capital allocation strategy.

[email protected] Lee Jeong-hwa Reporter