Tech conglomerate Sea has seen its losses more than double in its 2QFY2022 ended June 30, compared to the same period a year earlier.
Losses for Sea rose from US$433 million ($595.66 million) to US$931 million in 2QFY2022. However, revenue for the company rose 29% for the quarter to US$2.9 billion.
For its digital entertainment segment Garena, revenue came in at US$0.9 billion in 2QFY2022 compared to US$1 billion a year ago, mainly due to the softening of bookings post-COVID.
For its e-commerce platform Shopee and financial services arm SeaMoney, revenue increased by 75.6% to US$1.8 billion in 2QFY2022, up from US$1 billion in 2QFY2021.
Sea explains that this increase was primarily driven by the growing adoption of products and services across its e-commerce and digital financial services businesses.
Meanwhile, revenue from the sale of goods increased by 11.7% y-o-y to US$286.7 million in 2QFY2022, primarily due to the increase in its product offerings.
However, although revenue rose, Sea also recorded a notable increase in general and administrative expenses, as well as research and development (R&D) expenses.
General and administrative expenses increased by 95.9% y-o-y to US$476 million in 2QFY2022, primarily due to an increase in the allowance for credit losses from its digital financial services business.
This increase in allowance was driven by growth in loan receivables, higher staff costs as well as higher office facilities and related expenses, to support the business growth.
Separately, R&D expenses increased by 115% y-o-y to US$370.9 million in 2QFY2022 primarily attributable to higher staff costs from increased headcount growth, from investing in its technological capabilities and expanded service offerings.
Sea also recorded an impairment of goodwill of US$177.3 million in the second quarter of 2022, primarily due to the change in carrying amount of goodwill associated with our prior acquisitions. This was mainly driven by the lower valuations amid the market uncertainties, Sea says.
Shares of Sea closed at US$89.97 as of Aug 15, US$1.26 higher or up 1.42% from its previous close.