Rocket-backed Global Fashion Group's losses narrow in first half

Rocket Internet-backed Global Fashion Group (GFG) reported net revenue rose 36.6 percent on an adjusted, constant-currency basis in the first half of 2016, as operating losses nearly halved, excluding disposals in India and Southeast Asia.

GFG, made up of online fashion retail businesses in emerging markets regions, said that including the revenue contribution from acquisitions in Brazil, net revenue in constant currency rose 47.5 percent to 456 million euros ($512.73 million).

In July, GFG raised 330 million euros in funding from existing investors, cutting the holding of investor Rocket Internet to 20.4 percent. The funding round, together with its divestments, left it with pro forma cash of 342.6 million euros at the end of June.

The company said adjusted losses before interest, taxes, depreciation and amortisation (EBITDA) narrowed to 67.6 million euros in the first half of 2016 from 120.5 million euros in the year-earlier period.

The EBITDA margin improved to a negative 14.8 percent in the first half of 2016 from negative 33.4 percent in the first half of 2015, which the company said was driven by tighter inventory management and cost-cutting in its drive to profitability.

GFG sold operations in Thailand and Vietnam for an undisclosed amount to retailer Central Group in April. It sold its Indian fashion business Jabong to Flipkart for $70 million in cash in August, after the closing of the first half.

The company operates under the Lamoda brand in Russia, Dafiti in Latin America, Namshi in the Middle East, Zalora in Southeast Asia and The Iconic in Australia.

$1 = 0.8894 euros