Alibaba reported net profit for the three months to September of CNY 28.8 billion (USD 4.2 billion), down 60 percent from a year earlier when it booked a considerable gain on its stake in Ant Group. Extra costs for employee stock options based on the Ant stake also weighed on operating profit, which fell 33 percent to CNY 13.6 billion. Revenue for the fiscal second quarter was still up 30 percent to CNY 155.1 billion, and adjusted EBITDA rose 28 percent to USD 47.5 billion.
Cloud computing continued to show the strongest growth, with revenues up 60 percent year-on-year to CNY 14.9 billion. Alibaba said growth was led by demand from internet, finance and retail companies. However, Alibaba Cloud remains only 10 percent of group sales and is still loss-making, with negative EBITDA of CNY 156 million in the quarter. The Digital Media and Entertainment segment also contributed a loss of CNY 710 million, on revenue of CNY 8.1 billion, up 8 percent year-on-year.
Retail e-commerce in China still makes up the bulk of sales and grew by 26 percent to CNY 95.5 billion in revenue in Q2. International retail contributed CNY 7.8 billion, up 30 percent. The growth was mainly generated by Lazada and Trendyol, partially offset by the decrease in revenue from AliExpress as a result of the spin-off of the Russia business in October 2019 into a new joint venture.
Alibaba did not comment on the IPO of Ant Group, which started after the quarter was finished. Its 33 percent stake in the company contributed a profit share of CNY 4.7 billion in the quarter.
