Internet finance slowdown drags Rakuten profit Q2 lower

Internet finance slowdown drags Rakuten profit Q2 lower

TOKYO - Japan's largest e-commerce company Rakuten Inc posted a 9.9 per cent decrease in second quarter operating profit, dragged lower by weaker trading volumes on its Internet finance platform.

Rakuten's operating profit of 22.21 billion yen was largely in line the 22.35 billion yen average estimate by five analysts, according to Thomson Reuters StarMine.

Operating profit at the Internet finance unit fell 17.6 per cent compared to the second-quarter of last year, the company said in a statement. A stock market rally in the second-quarter of last year boosted profits.

The decline is in line with the results of other Japanese brokerages, which had also benefited from the rally, driven by Prime Minister Shinzo Abe's economic stimulus policies.

Rakuten, controlled by Japan's fourth-richest man Hiroshi Mikitani, also said the number of subscribers to its smartphone messaging app Viber now stood at 608 million, an increase of nearly 50 per cent from December last year.

Rakuten acquired Viber in February for US$900 million (S$1.12 billion) as part of Mikitani's strategy to boost overseas purchases to broaden Rakuten's businesses.

Viber competes with the messaging app from Japan-based Line Corp which is seeking an initial public offering that could value the company at up to US$20 billion. The company last week said its second-quarter revenue jumped by more than half.

Line, owned by South Korea's Naver Corp, said its subscribers now exceed 490 million, although the company does not say how many of them are active on a monthly basis, a key metric for valuing chat apps.

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