Coupang Inc., the U.S. parent of Coupang, surpassed 13 trillion won in second-quarter revenue this year but posted an operating loss of more than 800 billion won. It was the largest quarterly loss since its New York listing in 2021. The impact was significant from reflecting at once in this quarter's results the 624.6 billion won penalty surcharge imposed by the Personal Information Protection Commission in June.
According to the second-quarter consolidation earnings report Coupang Inc. filed with the U.S. Securities and Exchange Commission (SEC) on the 5th (Korea time), revenue was $8.856 billion, up 4% from the same period a year earlier ($8.524 billion). Applying the average won-dollar exchange rate of 1,501.89 won for the second quarter, the figure amounts to 13.3007 trillion won.
Profitability deteriorated sharply. The second-quarter operating loss was $556 million (about 835 billion won), turning to a loss from the same period a year earlier, when it posted operating profit of $149 million (about 209.3 billion won). Following an operating loss of 354.5 billion won ($242 million) in the first quarter, it was the second straight quarter of operating losses. Net loss came to $570 million (about 856 billion won), reversing from net profit of $31 million (about 43.5 billion won) in the second quarter last year. It was also the second straight quarter following a first-quarter net loss of 389.7 billion won. Loss per share was $0.32.
This loss was the largest since Coupang went public. The previous record quarterly operating loss and net loss were $396.59 million (about 480 billion won) and $404.97 million (about 522 billion won), respectively, in the fourth quarter of 2021. For the first half in total, the operating loss reached $798 million (about 1.1895 trillion won), and the net loss was $836 million (about 1.2457 trillion won).
The direct cause of the widening loss was the penalty surcharge. Coupang said it recognized about $410 million as an expense in this quarter's results under "a specific administrative penalty surcharge in Korea." The Personal Information Protection Commission imposed a 624.681 billion won penalty surcharge on Coupang in June over a customer data leak affecting 33.7 million people. It is the largest since the Personal Information Protection Act took effect. Coupang noted it plans legal action, but as a rule, a government penalty surcharge is recognized as an accounting expense in the quarter the disposition is handed down.
Even excluding the penalty surcharge, a loss remains. On an adjusted basis excluding the penalty surcharge, Coupang's second-quarter operating loss was $146 million (about 219.3 billion won), and net loss was $160 million (about 240.3 billion won). Compared with a year earlier, those figures worsened by $295 million and $192 million, respectively, indicating that profitability in the core business itself has yet to recover even after excluding one-off expenses.
Revenue in the core Product Commerce (Rocket Delivery, Rocket Fresh, Rocket Growth, Marketplace) segment was $7.425 billion (about 11.1515 trillion won), up only 1% from a year earlier. However, active Product Commerce customers (those who made at least one purchase in the quarter) during the period totaled 24.7 million, up 3% from a year earlier (23.9 million), returning to the level of the third quarter last year (24.7 million) just before the data leak incident.
◇ Losses from the Incheon logistics center fire to be reflected starting in the third quarter
The third-quarter outlook is not bright. In a filing the same day, Coupang Inc. said the fire that broke out in July at its Incheon logistics center caused significant damage to facilities, leased facilities, equipment, and inventories. It added, "Losses from this will begin to be recognized in the third quarter of this year." This suggests there is a high likelihood that large one-off expenses will weigh on results in the third quarter as well, following the penalty surcharge reflected in the second quarter.
Coupang Inc. estimated at about $246 million (about 350 billion won) the book value of its own inventories and fixed assets at the facility just before the fire and its payment obligations for sellers' inventories stored there. While not a finalized loss amount, it indicates the scale of assets exposed by the fire. Coupang said it has property and liability insurance for incidents including fires and plans to file claims, but added that additional liabilities and expenses not yet identified or quantifiable at this time could arise, including losses from facility damage and inoperability, restoration expenses, fines from regulatory authorities, and lawsuits.
In addition, the National Tax Service completed a tax audit in June for the 2021–2025 tax years and notified the company of approximately $208 million (about 300 billion won) in additional taxes due, including additional tax and interest.