Latin America’s e-commerce powerhouse MercadoLibre Inc posted better-than-expected profits for the first quarter, lifted by growth in its largest market following the collapse of Brazilian retailer Americanas SA.
Net income more than tripled from a year earlier to total US$201 million, above the US$154.4 million forecast by Wall Street, as it further gained market share in Brazil’s e-commerce sector and posted double-digit growth at its fintech arm in Mexico and Argentina. Operating margins at the company rose to 11.2 percent, also beating expectations.
“Brazil had a pretty good quarter in commerce, and we’re gaining market share very strongly, above our expectations,” said Andre Chaves, a senior vice-president at the firm, in an interview. The company’s volume growth in Brazil saw “a marked acceleration in a market that decelerated overall.”
Gross merchandise volume totaled US$9.4 billion for the period, helping push total revenue to US$3 billion.
After Rio de Janeiro-based retailer Americanas filed for bankruptcy protection in January, investors started to eye the potential for rivals like MercadoLibre to expand their market share. Americanas’ debacle, which followed the unveiling of fiscal inconsistencies, led other companies to have improved bargaining power with suppliers.
by Vinícius Andrade & Patrick Gillespie, Bloomberg