Australian buy-now-pay-later (BNPL) firm Zip Co Ltd posted a wider annual loss on Thursday, signalling lacklustre outlook for fintech firms in the wake of soaring inflation.
BNPL operators, particularly, have seen their valuations collapse in recent times as reduced customer spending and rising interest rates have squeezed their margins and pushed the firms’ funding costs higher.
Shares of Zip ended a volatile session 2.1% lower after climbing up to 8.8% earlier in the day.
Loss from ordinary activities after income tax attributable stood at A$1.11 billion ($772.0 million) for the year ended June 30, compared with a loss of A$678.1 million last year.
The company, which had earlier said it was reviewing the goodwill against its newly acquired U.S. and European businesses, on Thursday recorded an A$821.1 million impairment charge for the year.
Zip, which made several global acquisitions after a pandemic-driven boom in BNPL businesses, had last month dumped a buyout of U.S. rival Sezzle Inc.
Reuters