Coupang Records 800 Billion Won Loss in Q2... "Will Appeal 300 Billion Won Tax Assessment"

[Anchor]

Coupang, which was involved in a massive personal data leak incident, has posted its largest-ever operating loss in the second quarter. While sales reached a record high, the burden of fines dragged down its financial performance. Additionally, Coupang announced that it cannot accept an additional tax notice of approximately 300 billion won and will pursue appeal procedures.

Reporter Chae Heesun has the details.

[Reporter]

Coupang Inc., the parent company of Coupang, has recorded its largest operating loss since its listing on the U.S. stock market in 2021.

The operating loss for the second quarter stood at 835 billion won, which is about 20% higher than Wall Street expectations.

Coupang's total operating loss for the first half of this year reached approximately 1.18 trillion won, wiping out most of its operating profits from the past two years.

The impact was largely driven by the reflection of the 624.6 billion won penalty imposed in June over the personal information leak incident.

[Gaurav Anand / Chief Financial Officer (CFO), Coupang Inc.: This includes a $410 million penalty imposed by South Korean regulators. The penalty remains subject to judicial review, and we plan to appeal through the court.]

Excluding the penalty, the scale of the loss narrowed compared to the first quarter. With quarterly sales hitting a record high of 13.3 trillion won, Coupang expressed optimism regarding a recovery in earnings.

[Kim Bom-suk / Chairman, Coupang Inc.: The total number of membership subscribers has already surpassed pre-incident levels. Most of the spending has recovered, and we are growing in the same manner as before.]

However, the third quarter is expected to reflect losses amounting to 350 billion won resulting from the Incheon logistics center fire last month. Combined with a recent pre-tax notice of around 300 billion won from the National Tax Service, a recovery in profitability is expected to remain challenging through the second half of the year.

Coupang disclosed that it cannot accept the National Tax Service's decision and will initiate appeal procedures.

[Kim Hyun-dong / Professor of Business Administration, Pai Chai University: Coupang is currently in a very difficult situation. Naturally, there is bound to be a strong motive to disclose favorable information to reassure shareholders.]

With heavy fines and taxes raising forecasts for record-high annual losses, speculations are rising that the issues surrounding Coupang could potentially develop into a diplomatic friction point between South Korea and the United States.

(Photo: Yonhap News)
(Reported by Lee Jae-young | Video by Kim Jin-won | Graphics by Choi Ha-neul)
※ Please note: This article was translated by AI and may contain errors.