Rakuten shares jump as mobile losses narrow

Rakuten Bank

14/08/2023 02:48

By Anton Bridge
       TOKYO, Aug 14 (Reuters) - Rakuten Group  4755.T  shares
surged on Monday morning after the e-commerce giant reported
narrowing losses at its cash bleeding mobile unit last week
alongside assurances that it can cover its debt burden for the
next financial year.
    Shares jumped as much as 5.2% when markets opened, hitting
596.9 yen before shedding some gains. Japanese markets were
closed on Friday for a holiday.
    The April-June period was Rakuten's 12th straight quarter of
losses as its mobile offering has failed to bring in the
customers to cover the immense costs of building out the
network.
    But cost-cutting efforts appear to be bearing fruit.
    A Jefferies research note published after last Thursday's
earnings release credited Rakuten's roaming agreement with KDDI
 9433.T , one of Japan's three incumbent networks, as enabling
cost improvements at the newcomer.
    Rakuten has taken to publicly listing its more successful
units to generate cash, listing its internet banking business -
Rakuten Bank  5838.T  - in April and applying to list its
securities business in July.
    Last week, Rakuten also announced plans to consolidate its
payments and points businesses and fold them into Rakuten Card,
its credit card and loans unit. It left open the possibility of
listing the business in the future.
    Rakuten also committed to taking on no additional gross
debt, instead using equity-related financing to reduce its debt
burden.
    The group has a total of 1.9 trillion yen ($13.11 billion)
in debt, with 406 billion yen due in 2024 and a further 430
billion yen in 2025, according to Refinitiv data.
    ($1 = 144.9500 yen)

 (Reporting by Anton Bridge; Editing by Jacqueline Wong)
 ((Anton.Bridge@thomsonreuters.com;))