Japanese ecommerce titan Rakutenhas 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.
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