Latam’s MercadoLibre profits soar, company plans growth

South American e-commerce giant MercadoLibre Inc (MELI.O) reported on Wednesday that its second-quarter net income rose 79.8% year-on-year, beating earnings forecasts.

The company, present in 18 countries including Brazil, Mexico and Colombia, reported a net income for the three-month period of $123 million, beating a Refinitiv forecast of $98.9 million.

After the results, MercadoLibre’s senior strategy vice president Andre Chaves said the company has plans to grow in Latin America, but “there is nothing in sight at the moment in terms of acquisitions.”

“If so, it will be something small,” Chaves said.

Brazil, which represented 56% of the group’s net revenue in the quarter, remains the company’s main focus, Chaves added.

In March, the group announced an investment in Brazil of 17 billion reais through this year, part of which would be used to open four logistics centers and double its delivery capacity.

Furthermore, the company said during a call with analysts it sees Mexico’s potential to be a larger and more profitable market in the longer term, adding this has been their first profitable quarter in the country in the last five years.

Shares of MercadoLibre were up 12% at 6:00 pm Eastern time (2200 GMT) in extended trade Wednesday.

The company’s net revenue rose 56.5% in constant currency and 52.5% in dollars to $2.6 billion as it registered growth in revenues from its commerce and fintech sectors.

The group’s financial arm, Mercado Pago, saw net revenue soar 112.5% ​​in dollars year-on-year to $1.2 billion, as it expanded its lines of business such as insurance and investment tools.

Mercado Pago reported an 83.9% jump in total payment volume in constant currency to $30.2 billion. Its credit portfolio reached $2.7 billion in the quarter, a 12.5% increase in comparison to the previous quarter.