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Live news: Eurozone inflation falls more than expected to 10%

Klarna said it had made “huge progress” towards profitability even as the losses at the once high-flying Swedish payments group ballooned in the third quarter.

“Klarna has made huge progress on our path to profitability, which we expect to hit on a monthly basis in the second half of 2023,” said chief executive Sebastian Siemiatkowski.

The payments group on Wednesday reported a net loss of SKr2.1bn ($199mn) for the latest three-month period compared with a loss of SKr1.1bn a year earlier.

The group, however, trimmed its losses by more than 40 per cent compared with the second quarter of 2022, which it said reflected its cost-savings efforts, such as cutting 10 per cent of its staff in May.

Total net operating income rose 18 per cent year on year to Skr4bn, with particularly strong growth in the UK and US.

Klarna’s valuation slumped from $46bn in June to $7bn following an $800mn funding round in July with investors including Sequoia and Mubadala, the Abu Dhabi sovereign wealth fund.

The company, at its half-year results in August, said it would look at tightening lending, especially to new customers, to stem losses.

Klarna has been one of the pioneers in the buy now, pay later sector, which allows consumers to defer or divide payments into instalments.

While the products are highly popular among younger users, a combination of worsening economic conditions, growing scrutiny from regulators including in the UK and competition from lenders and big tech companies pose a challenge to their business model.

Read More: Live news: Eurozone inflation falls more than expected to 10%

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