Mercado Libre’s profits increase 71% during the first quarter

São Paulo. Mercado Libre on Thursday reported a 71 percent increase in its first-quarter net profit compared to the same period last year, exceeding analysts’ expectations, as the performance of its operations in Brazil and Mexico offset some negative effects. in Argentina.

The e-commerce giant, which operates in 18 countries and also owns the fintech Mercado Pago, obtained a net profit of 344 million dollars in the first three months of the year, higher than the average forecast of the analysts consulted by LSEG of 314 million dollars.

MercadoLibre recorded net income of 4.3 billion dollars, 36 percent more than a year before and above the 3.9 billion estimated by analysts.

Operating margins, which analysts had highlighted negatively last quarter following higher logistics costs during the year-end peak, stood at 12.4 percent, up from 11.2 percent a year earlier.

Chief Financial Officer Martín de los Santos told Reuters that Argentina’s macroeconomic situation had affected margins, as a sharp currency devaluation late last year weighed on logistics costs and reduced its business there. Even so, the results of Brazil and Mexico allowed annual growth.

“Obviously, we continue to have a profitable business in Argentina. It’s just not as profitable as before,” Santos said.

Argentina, where MercadoLibre was founded, accounted for 15 percent of its earnings before interest and taxes (Ebit) in the first quarter, up from more than 50 percent a year earlier.

MercadoLibre recorded total Ebit of $528 million in the quarter, 29 percent more than a year earlier, exceeding analyst forecasts of $488 million.

Regarding its fintech unit, MercadoLibre increased its loan portfolio by more than 600 million dollars compared to the previous quarter, the highest figure since the beginning of 2022, up to 4.4 billion dollars. The shorter-term delinquency rate rose to 9.3 percent from 8.2 percent in December, but that of more than 90 days fell to 17.9 percent from 18.7 percent.