Singapore-based Sea on Tuesday (Mar 7) posted its first quarterly profit, as the gaming and e-commerce company benefited from major cost cuts it undertook to offset a post-pandemic slowdown in demand.

Shares of the company closed 22 per cent higher on the back of the announcement.

As part of its turnaround plan, the firm had shuttered operations in some countries, cut jobs and slashed its spending on marketing.

For the fourth quarter ended Dec 31, Sea’s marketing and sales expenses declined by 61 per cent, helping it pull down total operating expenses by nearly a quarter to US$1.35 billion.

“We exited or downsized operations in non-core markets, streamlined our pipeline with investments and project closures and deprioritised non-core initiatives,” CEO Forrest Li said.

“Our decisive pivot to focus on efficiency and profitability since late last year is already driving meaningful bottom-line improvements.”

The company’s net income attributable to shareholders was US$426.8 million, or US$0.72 per share, compared with a loss of US$617.6 million, or US$1.12 per share, a year earlier.

While Sea had a meteoric run in 2020 and part of 2021, when demand led by the COVID-19 pandemic lifted revenues and helped it expand into Mexico and Spain, its growth has tapered in line with a broader slowdown in e-commerce and digital entertainment demand.

The company’s market capitalisation, too, dropped to US$37 billion after its shares plunged more than 75 per cent last year. Sea was valued at more than US$200 billion at its peak in late 2021.

Reuters had reported in September that the firm’s e-commerce unit Shopee would exit Argentina and shut local operations in Chile, Colombia and Mexico, while its gaming arm Garena will lay off hundreds of staff in Shanghai.

Sea also cut 10 per cent of its workforce in six months, according to reports in November.

The ban of Sea’s Free Fire in India, the top market for the popular mobile game, was another blow last year.




TrufflEat Olio Evo 300x207 1

Leave a Reply