LatAm Autos revenue down 25% on Argentina
04 Sep 2017
The revenue of LatAm Autos, the Latin American auto site operating in Argentina, Bolivia, Ecuador, Mexico, Panama, and Peru, dropped nearly 25 percent in H1 of FY2017 from H1 of FY2016, following the shutdown of the company’s Argentinian office.
LatAm Autos is listed on the Australian Securities Exchange (ASX) and all money values are in Australian dollars (AUD).
In H1 of the current financial year, revenue dropped to $2.9 million AUD ($2.3 million U.S.) from $3.9 million AUD, due to a sharp decline in revenue generated in Argentina, which used to be one of the vertical’s top, revenue-producing assets along with the Mexican site. (Summary of results below.)
Argentina is no longer a key market of LatAm Autos, since a decision to rather focus on the best-performing assets, including Mexico and Ecuador.
“We expect H2 of FY2017 to be substantially stronger than H1 of FY2017 since it will be the first 6-month period in which most of the (so-called) depth products will have been sold for a full 6-month period in both Mexico and Ecuador,” the company said in its report to the ASX.
Despite declining revenue in Argentina, Panama, and Mexico, LatAm Autos saw its EBITDA loss decrease to $3.1 million AUD in H1 of the current financial year from $3.5 million AUD in H1 of FY2016.
In H1 of FY2017, Ecuador was the only country market to produce a positive EBITDA result.
LatAm Autos said it reduced cash-burn by 39 percent y-on-y in Q2, following its strategy switch, and excluding Argentina’s contributions and restructuring costs.
In February this year, LatAm Autos received proposals from undisclosed investors to acquire parts of the business.
After successfully raising $10 million AUD by issuing fully underwritten and secured convertible notes, LatAm Autos is expected to now focus its efforts on Mexico and Ecuador, while strengthening its business in Peru. It may also attempt to further accelerate revenue growth by its MotorCredit and CarSync products.
“In Mexico, MotorCredit represents a revenue opportunity to LAA of more than $74 million AUD per year,” it said, based on the assumption of a 5-percent market share.
The dealers deal
LatAm Autos also signed a collaboration agreement with ANCA, Mexico’s association of car dealers, in terms of which ANCA will promote Seminuevos as the exclusive auto classifieds site to its members. In return, Seminuevos will offer a special plan to ANCA members, the terms of which remain confidential.