Alibaba Annual Profits Lower, Rocked by Investment Losses, Slowing China Economy

variety.com:

Patrick Frater Asia Bureau ChiefChina’s e-commerce and media giant Alibaba recorded lower profits in the 12 months to March 2022, following a year of turmoil for tech companies, a weakening Chinese economy, a COVID revival and Russia’s war in Ukraine..Group revenues increased by 19% in the year to March, reaching $135 billion (RMB853 billion).

In the fourth quarter, revenues grew 9% to $32.2 billion (RMB204 billion).Net profits bore the brunt of the difficult conditions and the market value of some of its investments in other companies reduced by some $7 billion.

Annual net income was stated as $7.43 billion (RMB47.1 billion), a two-thirds drop. The group’s preferred Non-GAAP profit analysis (which excludes such investment valuations) came in instead at $21.5 billion (RMB136 billion), down by a less alarming 21%.

Alibaba has minority stakes in media businesses ranging from cinema chains to film sales and production companies. It has majority control of the Taopiaopiao movie ticketing platform, the Youku video streaming business, the South China Morning Post newspaper and the separately-listed Alibaba Pictures film production and distribution unit.The group said that in the March quarter, Youku’s daily average paying subscriber base increased 14% year-over-year “primarily driven by quality content and continued contribution from our 88VIP membership program.” Youku continued to improve operational efficiency “through disciplined investment in content and production capability, which resulted in narrowing of losses year-over-year during the quarter.” But ti did not disclose subscriber numbers.Revenue from the wider ‘Digital Media and Entertainment’ segment in the quarter ended March 2022, was RMB8.00 billion ($1.26.