MercadoLibre published the financial results for the first quarter of the year and its share price jumped almost 9 percent this Friday. The company is expanding in different countries in the region with different verticals such as e-commerce, logistics and its payments leg called MercadoPago. In recent days, this last company has been involved in a dispute with banks over the full interoperability of QR codes.
According to a report from the brokerage agency Invertir Online, the numbers from MercadoLibre’s latest balance sheet were more than solid. “HE greatly exceeded market expectations in terms of revenue (which totaled $4.33 billion relative to the $3.94 billion analyst consensus),” the agency said. It was added that the company also managed to place above projections when it comes to earnings per share. This figure stood at $6.78 (+71 percent year-on-year) when estimates were for $6.12 per share.
Mercado Libre, according to the analysis of Invertir Online based on the balance sheet presented by the company, had a revenue growth of 36 percent year-on-year, of the total volume of payments of 35 percent (reaching 40.7 billion), and of the gross volume of products of 20 percent (totaling 11.4 billion). In turn, operating income reached 528 million, with an operating margin of 11.2 percent, improving after the one-time impact related to the tax contingencies of the previous quarter.
In the quarter through March, MercadoLibre managed to total $11.4 billion in merchandise volume. In this sense, among some of the aspects that explain the good performance of the e-commerce segment, highlights the growth rate of Mexico and Brazil, with increases of 30 percent. These appease the difficulty of the segment in Argentina (a country that is in a strong recession due to the fiscal and monetary adjustment policies promoted by the Milei government).
As for his Logistics, MercadoLibre shipped 379 million items in the first quarter of 2024, growing 25.4 percent year-on-year. The segment in question experienced a decrease in costs after going through the most demanding season.
On the other hand, the Fintech segment remains solid, maintaining a continuous growth rate, a situation that is reflected in the rise in the total payment volume (TPV), which registered a increase of 35 percent year-on-year. From the company itself they highlighted that they managed to achieve more than 49 million monthly active users at the end of March (+36 percent year-on-year). While, total assets under management (AUM) experienced a growth of 90 percent.
In this segment, in which it operates with the MercadoPago company, in recent days a dispute with the banks. MercadoPago intends to receive a commission to allow bank wallets to read their QR codes and pay from Credit cards. This modality was going to be present from May but was delayed due to the lack of a trade agreement.
Meanwhile, the Cash generated by MercadoLibre from operations showed another solid quarter, totaling $1,512 million. 148 million were allocated to capital investments (CAPEX) to continue improving its distribution and logistics networks. Thanks to robust cash generation from operations, net debt was reduced, totaling a net debt/EBITDA ratio of 0.50x (from 1.25x a year ago). “MercadoLibre continues to demonstrate the penetration it achieves in the markets in which it is inserted, such as Brazil and Mexico, where it experienced high growth rates, improved profitability and reduced its debt,” the Invertir Online report closed.
