Coupang Inc (NYSE:CPNG), South Korea’s leading e-commerce company, stock fell 2.36% (As on Mar 3, 11:23:05 AM UTC-4, Source: Google Finance) after the company reported a wider loss in the fourth quarter as the company continued to aggressively spend on infrastructure and services in the face of intensifying competition.  Operating losses increased to $396.6 million for the quarter ended in Dec. 31, compared with $130.9 million a year earlier, according to a statement. Sales rose 34% to $5.1 billion, while the number of active clients increased 21%. As part of its effort to boost earnings, Coupang increased the monthly cost of its Wow subscription for new members to 4,990 won ($4.15). Although the hike only applies to customers who join from this year, analysts expect it will eventually also be levied on current members.  The company said that it had about 9 million paid Wow members at the end of last year. If Coupang expands the membership fee hike to about 5 million members, it may contribute around 125 billion won to sales and profits, Park Sang-joon, analyst at Kiwoon Securities said in a note on Dec. 30, when Coupang announced the membership price increase. Still, it may not be sufficient to lead to a profit turnaround.

CPNG in the fourth quarter of FY 21 has reported the adjusted loss per share of 23 cents, missing the analysts’ estimates for the adjusted loss per share of 19 cents, according to Refinitiv Ibes Data (analyst estimates). The company had reported the adjusted revenue growth of 34 percent to $5.08 billion in the fourth quarter of FY 21, missing the analysts’ estimates for revenue of $5.15 billion. Constant currency revenue growth was 39%, more than double the growth rate of the Korean e-commerce segment. The company reported gross profit of $806 million, up 24% YoY from Q4 2020, net loss of $405 million, compared to net loss of $83 million in Q4 2020 and Adjusted EBITDA loss of $285 million, compared to $82 million in Q4 2020. Q4 Net loss and adjusted EBITDA included approximately $130 million in incremental costs primarily related to heightened COVID-19 conditions in Korea.

For fiscal 2022, the company expects total Adjusted EBITDA loss to be of less than ($400) million and Product Commerce segment Adjusted EBITDA profitable by the fourth quarter of 2022 compared to a (2.6)% Adjusted EBITDA margin in Q4 2021.