China's Didi reports third-quarter rebound from regulatory crackdown

BEIJING (Reuters) - China’s largest ride-hailing company Didi Global reported third-quarter net income of 929 million yuan ($128.42 million) on Friday, as it built back its business after a regulatory crackdown.

 

That compared with a net loss of 284 million yuan in the same quarter last year, the company said in its financial statement, revised from an earlier reported net profit after the group adopted a new accounting standard earlier this year.

 

Continuing its recovery after being badly hit by a regulatory crackdown, the company’s revenue was up 5% at 53.9 billion yuan for the three months to Sept. 30.

 

Didi drew the attention of China’s cyberspace regulator in 2021 over its pursuit of a U.S. initial public offering without approval, prompting an inquiry that prohibited it from adding users and saw many of its apps removed from stores.

 

The regulator handed Didi a $1.2 billion fine in July 2022 over a data security violation, before granting the company permission to relaunch its apps in early 2023.

 

Travel demand in China has shown signs of a recovery, though economic growth is sluggish. The company completed a total of 3.2 billion transactions during the quarter, a 10.6% year-on-year rise across its platforms in China.

 

Didi, which is seen as China’s answer to Uber, generates most of its revenue at home but also has a significant presence in Brazil and Mexico.

 

Third-quarter revenue from international operations rose to 2.9 billion yuan from 2 billion yuan a year earlier.

Over the past two years, Didi has been divesting non-core assets. In August it sold its smart cockpit unit to a subsidiary of state-backed map provider NavInfo. 

 

Last year, Didi divested its electric vehicle development business - the majority of its EV-related assets - to Xpeng.

 

($1 = 7.2342 Chinese yuan renminbi)

 

 (Reporting by Liam Mo and Brenda Goh; Editing by David Goodman and Jan Harvey)