Singapore’s Sea reports wider loss on e-commerce

SINGAPORE: Sea Ltd, operator of South-East Asia’s biggest gaming platform, reported a wider third-quarter loss on rising investments at e-commerce unit Shopee.

Net loss increased to US$218mil in the three months ended Sept 30 from US$132.8mil a year earlier, the company said. Total revenue rose to US$204.9mil from US$94.1mil.

Sea has been struggling to keep its footing since going public in October 2017. The Singapore-based company sold stock in its IPO at US$15 a share, while its shares closed in US trading at US$12.11.

Revenue at digital entertainment unit Garena increased 41% to US$112.5mil during the quarter, aided by the popularity of Free Fire, the first self-developed hit game at the company.

Revenue at e-commerce unit Shopee increased to US$65.9mil group chief strategy officer Alan Hellawell will depart the compa- ny effective Nov 23, according to a statement. Hellawell, a former analyst, has been a key executive to deal with investors since joining the company last year.

The move follows high-profile departures that include group president Nick Nash whose retirement at the end of 2018 was announced in February and Jin Oh, former CEO of Garena who left the firm effective Aug 31.

The company said it has promoted Terry Zhao as president of Garena. Sea raised its 2018 forecast for total adjusted revenue – which considers changes in deferred revenue – to between US$930mil and US$970mil. That compares with its previous guidance of between US$780mil and US$820mil.

“The robust momentum across our e-commerce and digital entertainment businesses is reflected in our full-year outlook,” Sea chief executive officer Forrest Li said during yesterday’s earnings conference call.

Sea is also forecasting e-commerce GMV for the full year 2018 to between US$9.2bil and US$9.7bil, up from its previous estimate of between US$8.2bil and US$8.7bil.

Sea encourages investors and analysts to focus on financial results that are adjusted or not in compliance with generally accepted accounting principles.

In its earnings release, it uses the term “adjusted” more than 60 times, while it uses GAAP three times.

Howard Soh, Sea’s director of strategy and corporate development, said on the conference call that non-GAAP financial measures such as adjusted revenue and adjusted net loss can help in understanding the company.

“We believe these measures can enhance our investors’ understanding of actual cash flows of major businesses when used as a compliment to GAAP disclosures,” he said. — Bloomberg