Klarna's half yearly operating loss widens

Swedish payments company Klarna has reported a half-yearly operating loss that more than tripled, weighed down by an increase in employee costs, higher credit losses and continued investment in market expansion.

The operating result for the first half of the year was a loss of SEK6.17 billion ($578.52 million) compared with SEK1.76 billion in the year-earlier period.

Total credit losses rose to SEK2.85 billion from SEK1.85 billion crowns a year earlier.

The buy now, pay later (BNPL) giant grew fast during the pandemic, but since the start of the year, rampant inflation and the war in Ukraine have worsened business sentiment.

The Swedish company laid off about 10% of its workforce in May and last month raised $800 million of funds at a valuation of $6.7 billion, down around 85% from the $46 billion price-tag it attracted last year.

"We have had a few years now where growth has been really heavily prioritised by investors," Chief Executive Sebastian Siemiatkowski said in a statement. "Now, understandably, they want to see profitability.”

Klarna said it has revisited its 2022 plans and will implement a number of prudent and preemptive measures to meet the evolving challenges.

The company's revenue grew 24% to SEK9.1 billion and gross merchandise value (GMV) was up 21% to SEK396 billion.

However, total operating expenses before credit losses also rose to SEK10.81 billion from SEK6.26 billion.

Klarna, which has 150 million consumers on its platform across 45 markets, counts Germany, the US and Sweden among its top markets.