Alibaba said it reported solid results for its fiscal fourth quarter to end March, driven by strong growth at its core commerce business and investments made in longer-term growth initiatives. CEO Daniel Zhang said the continuing roll out of the company’s New Retail strategy has helped Alibaba's e-commerce platform develop into the leading retail infrastructure of China. During the quarter, the company said it also doubled down on developing its technology, cloud computing, logistics, digital entertainment and local service in order to capture consumption growth in China and other emerging markets.
Revenues for the three months to end March leaped 61 percent from the year before to CNY 61.932 billion (USD 9.873 billion), boosted by 62 percent growth at its core commerce and 105 percent leap at cloud computing, but also the 34 percent increase at digital media and entertainment and 6 percent lift from innovation initiatives. Growth at e-commerce was again driven by more users. The number of active consumers on Alibaba’s China retail marketplace reached 552 million at the end of March, from 515 million at the end of December and 454 million the year earlier. Mobile MAUs went to 617 million at the end of the quarter, against 580 million at end December and 507 million year-on-year.
The adjusted EBITDA advanced 11 percent to CNY 16.805 billion, while the net profit slipped lower to CNY 7.561 billion from 10.647 billion year-on-year. Net cash provided by operating activities amounted to CNY 14.180 billion. Alibaba attributed the profit decline to one-off gains related to disposals, in 2017. Profit was tempered by total costs and expenses rising to CNY 52.711 billion, or 85 percent of revenues, from 29.047 billion the year before, or 75 percent of revenues. Cost of revenue almone rose by 40 percent to CNY 15.490 billion, while product development expenses expanded to CNY 6.686 billion from 4.518 billion.
For the full year, revenues increased 58 percent from the year before to CNY 250.266 billion, with core commerce up 60 percent and cloud computing leaping 101 percent. The adjusted EBITDA went 40 percent higher to CNY 97.003 billion with the net profit at CNY 63.985 billion and net cash from operating activities at CNY 125.171 billion.
Looking towards 2019, Alibaba expects revenues to advance over 60 percent. Excluding the consolidation of Ele.me and Cainiao Network, it will go up over 50 percent. The company added that it will continue to invest in operating free cash flow in order to generate long-term and sustainable profit growth.
