Japan's Rakuten swings to quarterly loss on Lyft, mobile service

Japan's Rakuten swings to quarterly loss on Lyft, mobile service

Japan's Rakuten Inc reported an unexpected quarterly loss on Thursday, hit by the depressed value of its investment in ride-hailing firm Lyft Inc and heavy spending on a new wireless service.

FILE PHOTO: A campaign advertising of Rakuten Pay, QR code mobile payment system operated by Rakute
FILE PHOTO: A campaign advertising of Rakuten Pay, a QR code mobile payment system operated by Rakuten, is displayed at a coffee shop in Tokyo, Japan May 30, 2019. REUTERS/Issei Kato/File Photo

TOKYO: Japan's Rakuten Inc reported an unexpected quarterly loss on Thursday, hit by the depressed value of its investment in ride-hailing firm Lyft Inc and heavy spending on a new wireless service.

The company said it booked a 1.8 billion yen (US$17 million) operating loss in the April-June quarter compared with a 61.6 billion yen profit in the same period a year earlier. The market had expected a 5.2 billion yen profit, according to the average of five analysts compiled by Refinitiv.

Rakuten, whose billionaire founder and Chief Executive Hiroshi Mikitani has a seat of Lyft's board, recorded a 28.4 billion yen unrealised loss on its stake in the ride-hailing firm for April-June, as it had warned in July. It recorded a 110 billion yen gain in the previous quarter.

The results come a day after SoftBank Group Corp posted an unrealised loss on its stake in Lyft rival Uber for the April-June quarter. The two money losing ride-hailing firms are locked in a cash-burning battle for dominance in the U.S. market.

Rakuten cited an operating loss in its mobile services business, as it steps up investment in a new wireless service that is due to launch in October. The move will make it Japan's No.4 mobile carrier.

(US$1 = 106.0200 yen)

(Reporting by Sam Nussey; Editing by Darren Schuettler and Muralikumar Anantharaman)

Source: Reuters

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