Singapore’s Sea Has Smaller-Than-Expected Loss on Cost Cuts

(Bloomberg) -- Sea Ltd.’s quarterly loss swelled less than analysts had estimated, helped by measures to curtail expenses as the Singapore online company’s growth slows.

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The adjusted loss before interest, taxes, depreciation and amortization widened to $357.7 million from $165.5 million a year ago, the company said Tuesday. Analysts had estimated $457.4 million on average. The net loss amounted to about $569 million, little changed from a year earlier.

The gaming and e-commerce company and regional tech peers Grab Holdings Ltd. and GoTo Group -- all of which are loss-making -- have seen their stock prices plummet this year as they navigate an economic slowdown, rising interest rates and accelerating inflation. The slowing growth in Southeast Asia’s internet economy shows that even emerging digital markets aren’t immune to economic headwinds.

Fall of the World’s Hottest Stock Cost Sea Founders $32 Billion

To navigate a more challenging market, Sea has cut about 7,000 jobs, or roughly 10% of its workforce, in the past six months, according to a person familiar with the matter. It has also shuttered operations in India and some European and Latin American markets in a bid to trim costs and reach positive cash flows. Headcount reduction is an “ongoing exercise,” Chief Corporate Officer Yanjun Wang said on a conference call, signaling more cuts may be in the works.

Shares of the company advanced 20% in trading before US markets opened. The stock had plunged 80% this year in New York through Monday.

Sea, Southeast Asia’s largest tech company, cut its full-year forecast for digital-entertainment arm Garena’s bookings to between $2.6 billion and $2.8 billion from its previous guidance of $2.9 billion to $3.1 billion, set to be its first annual decline ever. It said it isn’t providing financial guidance for 2023, but added it’s “working towards” adjusted Ebitda breakeven for online-shopping arm Shopee by the end of next year.

Total revenue rose 17% to $3.2 billion in the September quarter. Revenue from Garena tumbled 19% to $893 million, the biggest year-on-year drop ever, reflecting waning popularity of hit mobile game Free Fire. Sales at Shopee climbed 32% to $1.9 billion.

--With assistance from Abhishek Vishnoi.

(Updates with pre-market trading in fifth paragraph)

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