FRANKFURT German e-commerce investor Rocket Internet (RKET.DE) has plunged to a first-half loss of 617 million euros ($691 million) after heavy writedowns on companies in its portfolio, reviving concerns about the value of its investments.
Its shares slumped more than 9 percent to their lowest level in two months.
Rocket has spent heavily to build up assets such as Global Fashion Group (GFG), which includes online fashion businesses Zalora in southeast Asia, Dafiti in Latin America and Lamoda in Russia, with a view to lining up a succession of lucrative stock market flotations.
Yet its plans have been dogged by writedowns on those assets and it has not set out any timescale for possible flotations.
Chief Executive Oliver Samwer said the group remained committed to its goals of placing broad bets to create a few proven winners in which it can continue to invest, in the hope of big paydays from eventual stock market selloffs.
GFG was one of 13 companies Rocket listed among its proven winners at the end of 2015. These companies range from food and grocery firms such as HelloFresh and Foodpanda, to operations in fashion, general merchandise and home furnishings.
"We still expect at least three of our selected portfolio companies to turn profitable by the end of 2017, and that the aggregate EBITDA losses of the selected portfolio companies will have peaked in 2015," Samwer said in a statement.
Jefferies said in a note to clients that Samwer's comments failed to mention any timeline for future initial public offerings. "No mention of one of its selected portfolio companies going public though, one of the other previous goals it had set out; a subtle retraction maybe?"
Announcing its first-half results late on Thursday, Rocket said its first-half loss was mainly down to a 383 million euro writedown on GFG, in which Sweden's Kinnevik (KINVb.ST) is a co-investor, as already announced in April.
Yet it also took other writedowns on asset impairments and fair-value adjustments for unspecified other investments. The company did not provide specifics in its statement and was not immediately available for further comment.
Rocket, which previously valued GFG at around 3 billion euros, was forced to slash its valuation in April by two-thirds after Kinnevik cut its own valuation of GFG to 1.0 billion euros.
The latest results statement marks a sharp reversal in tone from what it said in May, when it reported first-quarter results that showed some of its more successful companies making significant progress in reducing losses, including home furnishings online retailer Westwing and Namshi, the Middle Eastern arm of GFG.Worries over the value of the company's investments, heightened by the April writedown on GFG, have sent shares in Rocket down 33 percent this year.
The stock was down 9.7 percent by 0733 GMT on Friday.
First-half sales fell to 29 million euros from 71 million in the year-earlier period, Rocket said. "Loss and sales erosion seem shocking. But impairments were expected," a trader said. "(The group is) still no investment case. "Rocket Internet is due to report full first-half results on Sept. 22. ($1 = 0.8933 euro)
(Reporting by Victoria Bryan, Christoph Steitz and Eric Auchard; Editing by Leslie Adler and David Holmes)