Josh Ong is the US Editor at The Next Web. He previously worked as TNW's China Editor and LA Reporter. Follow him on Twitter or email him a Josh Ong is the US Editor at The Next Web. He previously worked as TNW's China Editor and LA Reporter. Follow him on Twitter or email him at [email protected].
Japanese ecommerce titan Rakuten has just posted solid results for fiscal 2012 with record highs in net sales, operating profit and ordinary profit, but its overall performance was dragged down by a $305 million loss (28.6 billion yen) related to restructuring charges for Play.com in the UK and Buy.com in the US.
Net sales for the company in 2012 were up 16.7% year-over-year to $4.74 billion (443 billion yen), and operating profit rose 2.1% to $770 million (72 billion yen). Ordinary profit totaled $765 million, an increase of 4.8% from 2011.
Rakuten had previously warned of the hefty restructuring loss for its overseas operations. It noted in its year-end results that changes in local regulations had prompted a reorganization at Play.com, while Buy.com recorded an impairment of goodwill because income fell short after the company adjusted its business model for “mid-term competitiveness”.
Both Play.com and Buy.com are in the process of changing over to Rakuten’s B2B2C marketplace model, which will set the sites up to act as a go-between for merchants and consumers. Play.com announced in January that it was phasing out direct sales of goods after a UK tax break expired.
The firm’s net income for the year came out to $208 million (19.4 billion yen), an improvement on its $24.45 million (2.3 billion yen) loss in 2011. In the first half of 2012, Rakuten achieved $2.56 billion (200 billion yen) in revenue and net income of $250 million (19.5 billion yen).
Looking ahead to fiscal 2013, Rakuten expects e-commerce and travel services to continue high growth, while it actively invests in emerging areas like e-books.
Rakuten made several significant moves last year, including a major investment in the Pinterest social network and the launch of the Kobo e-reader in its native Japan after purchasing the company for $315 million.
Image via Flickr / priceminister
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