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Mercado Libre: despite good balance sheet results, shares fall sharply due to tax blow in Brazil

Mercado Libre: despite good balance sheet results, shares fall sharply due to tax blow in Brazil
February 23, 2024 – 11:11

Sales of the e-commerce business increased 48.1%, helped by an increase in direct sales of products, however, it is suffering the impact of two extraordinary tax provisions in Brazil for a total of US$351 million.

He South American e-commerce giant Market Freedomiciled in Argentina, reported this Thursday that its profits remained stable in the fourth quartersince despite registering higher sales, it was not reflected in the profits for tax hits.

In this context, the actions of Free market in it pre market fall 138.98 units, or 7.6%, to US$1,817.98, after giving up also in the after market.

Tax blow to Mercado Libre

Free marketwith a presence in 18 countries, recorded a net profit of US$165 million in the period, unchanged compared to the result of the last quarter of 2022, due to the impact of two extraordinary tax provisions in Brazil for a total of US$351 million.

However, The company assured that these provisions should not have a material impact on cash in the future.

The total income of Free market grew 42% year-on-year to $4.26 billion, thanks to solid performance in its Mexico and Brazil markets.

The E-commerce business sales increased by 48.1%helped by an increase in direct product sales.

In Payment Marketthe company’s financial services arm, revenue rose 34%driven by an acceleration in credits.

Source: Ambito

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