Klarna posts Q3 operating profit after years of losses

STOCKHOLM (Reuters) – Swedish payments group Klarna said on Monday it has posted an operating profit in the third quarter after years of losses, and expects the momentum to continue in the holiday period.

The July-September operating profit at the privately held ‘buy now, pay later’ (BNPL) fintech, which last recorded a full-year surplus in 2018, was 130 million Swedish crowns ($11.97 million) against a year-earlier loss of 2 billion crowns.

Quarterly revenue rose 30% to 6 billion crowns.

“Our growth has accelerated in Q3 and we will build on this momentum in Q4 with further investments to drive value to our consumers and merchants alike,” CEO Sebastian Siemiatkowski said in a statement.

Credit losses as a percentage of gross merchandise volume was reduced by 56%, helped by improvements in underwriting.

The company, which signed a collective agreement with its workers just ahead of a potential strike this week, had said in May that it was on track to reach profitability on a monthly basis in the second half of the year.

($1 = 10.8645 Swedish crowns)

(Reporting by Supantha Mukherjee in Stockholm, editing by Terje Solsvik)