🤯 Picked by our AI, this stock rallied more than Nvidia this month, yielding 94% since MarchSee the stock

Rakuten shares jump as mobile losses narrow

Published 08/13/2023, 10:02 PM
Updated 08/13/2023, 10:07 PM
© Reuters. FILE PHOTO: The logo of Rakuten is pictured in Yokohama, Kanagawa, Japan, Aug 2, 2023. REUTERS/Miho Uranaka
KDDIF
-

By Anton Bridge

TOKYO (Reuters) - Rakuten Group shares surged on Monday morning after the e-commerce giant reported narrowing losses at its cash bleeding mobile unit last week alongside assurances that it can cover its debt burden for the next financial year.

Shares jumped as much as 5.2% when markets opened, hitting 596.9 yen before shedding some gains. Japanese markets were closed on Friday for a holiday.

The April-June period was Rakuten's 12th straight quarter of losses as its mobile offering has failed to bring in the customers to cover the immense costs of building out the network.

But cost-cutting efforts appear to be bearing fruit.

A Jefferies research note published after last Thursday's earnings release credited Rakuten's roaming agreement with KDDI (OTC:KDDIF), one of Japan's three incumbent networks, as enabling cost improvements at the newcomer.

Rakuten has taken to publicly listing its more successful units to generate cash, listing its internet banking business - Rakuten Bank - in April and applying to list its securities business in July.

Last week, Rakuten also announced plans to consolidate its payments and points businesses and fold them into Rakuten Card, its credit card and loans unit. It left open the possibility of listing the business in the future.

Rakuten also committed to taking on no additional gross debt, instead using equity-related financing to reduce its debt burden.

© Reuters. FILE PHOTO: The logo of Rakuten is pictured in Yokohama, Kanagawa, Japan, Aug 2, 2023. REUTERS/Miho Uranaka

The group has a total of 1.9 trillion yen ($13.11 billion) in debt, with 406 billion yen due in 2024 and a further 430 billion yen in 2025, according to Refinitiv data.

($1 = 144.9500 yen)

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.