Singapore’s Sea Ltd more than doubles losses on e-commerce spending

SINGAPORE ― Sea, the operator of Southeast Asia’s biggest gaming platform, said losses more than doubled in the first quarter on rising costs at mobile-shopping unit Shopee as it strives to lure more users with shipping and other promotions.

The Singapore-based gaming and e-commerce company said its net loss during the three months ended in March was US$215.6 million (S$290 million), compared with US$73.1 million a year earlier. Total revenue rose 65 per cent to US$155 million.

Sea, which initially modeled itself on China internet giant Tencent Holdings, has struggled since its initial public offering in October.

It has invested heavily to expand beyond games into payments and e-commerce. Growing losses have weighed on its shares, which were sold in the IPO at US$15 and closed at US$10.64 in New York.

The company’s “gross margin will remain pressured and losses will widen as it invests in growth,” Bloomberg Intelligence analysts Matthew Kanterman and Andrew Eisenson wrote in a note ahead of Sea’s earnings report.

Sea said sales and marketing expenses more than double from a year earlier to US$152.1 million.

Sea has forecast Shopee’s gross merchandise value to reach US$7.5 billion to US$8 billion in 2018. Shopee’s first-quarter GMV was US$1.9 billion, up from US$648.3 million a year earlier. BLOOMBERG