July 24, 2021

Rakuten in the red in the third trimester – Image

The Japanese group Rakuten fell back into the red in the third quarter of 2020, mainly because of investments for the development of its mobile offer in Japan, but on Thursday maintained its annual operational growth target “in double digits.” For the period July- September, the company reported a net loss of 44 billion yen (355 million euros), however smaller than that suffered a year earlier (114.4 billion yen). It had come out of the red in the second quarter thanks to the dynamism of its e-commerce activities favored by the state of emergency in Japan due to the pandemic. Rakuten also recorded in the past quarter an operating loss of 39.8 billion yen (321 million euros) , after operating profit of 1.1 billion a year earlier, a loss mainly attributable to its mobile operator activity. This segment alone recorded an operating loss of 57.9 billion yen (approximately 465 milli ons of euros) in the past quarter. Unsurprisingly, the Japanese group expects this activity to remain in deficit this year. The group of billionaire Hiroshi Mikitani, which launched in April in Japan a mobile telephony offer offering unlimited data and communications while slashing prices, is also making significant investments to develop its own networks.

Since September, it has offered access to its 5G network in major Japanese cities at the same price as its 4G service. Its total quarterly sales grew 13.3% year on year to 361.4 billion yen (2.9 billion euros). They made strong progress in its mobile telephony activity, in its online banking services and in its e-commerce activities in Japan. Rakuten also notes an improvement in sales of its tourism-related services, after a black second quarter due to the pandemic. However, they remain at a lower level than the previous year. For the whole of its 2020 financial year, the group is still forecasting “double-digit growth” in its operating profit (without taking into account its financial assets). It is counting on a recovery in demand in its activities as a tour operator and organizer of sporting events, two sectors which have particularly suffered from the impact of the pandemic, and on growth in its banking services.