(Bloomberg) -- Latin American e-commerce retailer MercadoLibre Inc. increased its revenue more than expected and gained market share in Brazil even as Asian players continue to strengthen their footprint in the company’s largest market.
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MercadoLibre posted a net revenue of $2.1 billion in the fourth quarter, a 61% increase from a year earlier and slightly above analyst estimate of $2 billion, according to a statement Tuesday. The company reported gross merchandise volume of $8 billion, roughly in line with expectations, fueled by growth in Brazil, where firms including Sea Ltd.’s Shopee e-commerce platform have been building up their local operations.
“We’ve gained share in Brazil, even with the Asian players,” said Andre Chaves, a senior vice president at the Buenos Aires-based firm, in an interview. “We look at competition carefully and we try to learn, but that shouldn’t change our strategy. Everything in the quarter points to a sustainable growth path.”
Despite strong revenues, MercadoLibre posted a net loss per share of 0.92 cents on the dollar, below analyst expectations of gains of 0.73 cents per share. The results reflect that the fourth quarter is a time of year that concentrates high sales volume but also high expenses, such as marketing, discounts and rebates, Chaves said.
“We share this with our sellers but we have to put some of the investments ourselves.”
The firm’s credit portfolio grew to over $1.7 billion in the third quarter, up from $1.1 billion in the previous three months, while non-performing loans improved at a moment when investors are concerned about potential deterioration in credit quality in Brazil amid rising inflation and rates.
The company acquired Brazilian logistics firm Kangu last year and recently announced the purchase of stakes in two crypto firms. Chaves declined to comment on possible merger targets and on how the company may further incorporate crypto functionalities in its back-end or its user-facing products.
Shares of MercadoLibre are down 55% since peaking in January of 2021, battered by rising U.S. rates and fears over fierce competition. MercadoLibre has 24 “buy” recommendations from analysts, five “holds” and no recommendations to sell, according to data compiled by Bloomberg.
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