Shopee-Owner Sea Reports Profit of $218.5 Million But Misses Analysts' Expectations

By Jace Dela Cruz

Mar 05, 2024 02:15 AM EST

Shopee's parent company, Sea, listed on the New York Stock Exchange, has declared a profitable year for the first time, reporting earnings of US$162.7 million (S$218.5 million) for 2023, marking a turnaround from a loss of US$1.7 billion in the previous year.

However, according to The Straits Times, this figure fell short of analysts' expectations, which were pegged at US$301.7 million.

(Photo : Solomon203/ Wikimedia Commons)

Profit of Shopee Surge

The revenue of the Singapore-based company, Sea, for the period saw a 4.9 percent increase to US$13.1 billion, up from US$12.4 billion a year before, surpassing analysts' expectations of US$12.9 billion.

The profit surge was driven by the performance of Shopee, the e-commerce arm of Sea, which achieved profitability in the first two quarters of 2023. The business unit's revenue for 2023 rose 23.5 percent to US$9 billion from US$7.3 billion in 2022.

Despite this, the e-commerce platform still recorded a loss of US$550.5 million for the year. Sea's chairman and CEO, Forrest Li, acknowledged the intensified competition in Southeast Asia but believed that "Shopee had a meaningful gain in market share" throughout 2023.

Other Ventures of Sea

Sea's digital entertainment unit, Garena, experienced a decline in revenue, dropping by 44 percent to US$2.2 billion in 2023 from US$3.8 billion in the previous year. However, it managed to secure a profit of US$1.2 billion in 2023.

The company highlighted the success of its mobile game "Free Fire," reporting improvements in user acquisition and retention. "Free Fire" was reportedly the most downloaded mobile game globally in 2023, with over 100 million daily active users in February.

Sea's digital financial services arm, SeaMoney, also achieved profitability for the first time, reporting earnings of US$490.2 million, compared to a loss of US$277.3 million in 2022.

That was primarily attributed to growth in the credit business, with revenue increasing by 44 percent to US$1.8 billion in 2023. Looking ahead to 2024, Sea plans to continue investing in user acquisition for its credit business while maintaining prudent risk management.

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