Poland's Allegro expects domestic earnings growth to ease in Q3
Q2 adjusted EBITDA tops estimates
Earnings growth to ease in Q3
Plans to launch in Hungary this year
Recasts paragraph 1, adds shares, CFO quote and analyst comments
Sept 19 (Reuters) -Poland's biggest e-commerce platform Allegro ALEP.WA beat second-quarter earnings estimates onThursday, but forecast slower growth at home, its largest market, in the current quarter.
Allegro's adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 34.9% to 908.3 million zlotys ($236.6 million) in Poland, above the 877 million zloty estimate in a company-compiled consensus.
It expects earnings growth in the third quarter to slow down at home to 11-13%, citing the base effect of monetisation measures and as it targets higher spending on marketing, logistics services and team expansion.
Group adjusted EBITDA rose 31.5% to 763.1 million zlotys, while revenue was up 12.5% to 2.7 billion zlotys. Poland accounts for 87% of revenue.
Allegro's shares, which have more than doubled from their lows nearly two years ago, were down 7% by 0752 GMT.
Marek Szymanski from IPOPEMA Securities said the guidance was in line with market expectations, and that profit taking was likely behind the share drop after the recent rise, with a potential further sale by Allegro's private equity owners also weighing on the stock.
Trigon brokerage analysts said in a note that strong second-quarter results were offset by "slightly more conservative guidance" but that they did not see basis to materially change their 2024 forecasts.
Allegro, founded in 1999 to become the go-to online shopping platform in Poland, has so far managed to defend its position from competitors such as Amazon AMZN.O, which launched in Poland in 2021, and Chinese e-commerce retailer Temu.
"So we are spending more on marketing because we don't intend to yield our position to them," Allegro's finance chief Jon Eastick said.
Allegro has beeninvesting in both buyer and seller relationships, and rolled out own parcel lockers and fintech services to boost its competitive edge and create new revenue streams.
It alsomoved abroad with the acquisition of Mall Group in 2022 and launched its platform in the Czech Republic and Slovakia. It plans to deploy in Hungary later this year.
Eastick said in a statement therewere signs customers were spending more per purchase in most categories.
Gross merchandise value (GMV), an industry metric used to measure transaction volumes, rose 11.6% in Poland, and Allegro expects the growth to come between 10% and 11% in the third quarter.
($1 = 3.8385 zlotys)
Reporting by Anna Pruchnicka; Editing by Sherry Jacob-Phillips, Mrigank Dhaniwala and Sharon Singleton
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