To 203 million euros, Rakuten doubled its net profit in the 1st quarter
- Rakuten saw its turnover increase by 18% in the first quarter of 2017.
- At the same time, its profit more than doubled, from 97 million euros in Q1 2016 to 203 million euros in early 2017.
- The Japanese giant explains these performances by the effectiveness of its strategy on its domestic market, by the positive synergies of its recent investments, and by the growth of its American subsidiary, Ebates.
The year starts very well for the Japanese Rakuten. After a year 2016 marked by a 16% increase in its revenues, the Internet services specialist closing the first quarter of 2017 with sales of 212 billion yen (1.7 billion euros), 18% more than in the first quarter of 2016.
At the same time, Rakuten’s net income more than doubled from 12 billion yen (97 million euros) in the first quarter of 2016 to 25 billion yen (203 million euros) in 2017. Finally, the company headed by Hiroshi Mikitani has significantly improved its profitability, its net income representing 12% of its turnover in early 2017, 5 points more than in the first quarter of 2016.
Rakuten share takes 10%
The Japanese giant partly explains these performances by the effectiveness of its strategy on its domestic market (improvement of customer satisfaction, aggressive sales policy, or even opening of the Rakuten ecosystem). Its American subsidiary specializing in cash back, Ebates, which has shown constant growth for several years, also contributed to the group’s good results.
Finally, Rakuten welcomes the synergies resulting from its recent investments. At the beginning of 2016, the company had indeed announced various acquisitions of equity stakes in FinTech. It has notably invested $ 30 million, with PayPal, in the capital of Acorns, an investment application, or even $ 15 million in Azimo, specializing in money transfers. In addition, the turnover generated by the FinTech activity of the group, of 77.96 billion yen (631 million euros), increased by 9% in the first quarter, for a rate of return close to 22% .
The financial markets reacted positively to the announcement of these results. The company’s stock has indeed seen its price increase by 10% this Friday morning, May 12.