Trade winds hit jobs portal
SYDNEY — The world’s largest listed job classifieds website, Seek Ltd, wrote down nearly half the value of its Brazilian and Mexican sites and forecast an earnings slowdown as trade and political uncertainty stalled growth in both markets.
The move illustrates how a deep recession in Brazil and trade turmoil on both banks of the Rio Grande have stifled the sort of rapid growth the Australian-listed firm hoped for when it earmarked the region for expansion three years ago.
It also underscores how fallout from a global shift toward protectionism has compounded economic problems in trade-dependent emerging markets.
Seek said its revenue and outlook soured in both Mexico and Brazil, which together comprised almost 16 per cent of the A$7 billion company’s first-half revenue. Things would likely get worse before they get better, it added.
Impairments totalled A$178 million ($132 million) on investments previously valued at A$335 million. Core earnings were forecast to rise five per cent to eight per cent in the year to June 2019, slower than the 15 per cent the company said it expected to report for the previous financial year.
Seek shares dropped nine per cent to a three-month low as the broader market edged higher.
David Pace, portfolio manager at Seek shareholder Greencape Capital, said while the company’s expansion plans could now take longer to bear fruit than expected, it was no reason to pull out of Latin America. “They are far too long-term focused and rational to be making decisions like that about highly prospective, perhaps now very long-term market opportunities,” he said.