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BEIJING, August 31  (TMTPOST) — Chinese retailing giant Suning's first-half revenue fell 60.25% year-on-year to 37.21 billion yuan ($5.5billion) with a net loss of 2.741 billion yuan ($405.4 million), according to its 2022 semi-annual report released on Tuesday evening.

After deducting non-recurring gains and losses, Suning reported a net loss of 2.757 billion yuan ($407.8 million) in the first half, down 45.12% year-on-year.

The second quarter saw a slight improvement from the last quarter, with revenue down about 55% year-over-year and net loss down 56% year-over-year to 1.712 billion yuan ($253.2 million), compared with a 64 percent year-over-year decline in Suning's revenue and a net loss of 1.029 billion yuan ($152.2 million) in the first quarter.

According to the financial report, merchandise sales revenue declined significantly due to the lack of consumer demand caused by the recurring pandemic and the lack of motivation to purchase home appliances impacted by the real estate market. Suning recently focused more on the home appliance business, with the weaker performance of FMCG and communication products. In addition, due to the company's tight liquidity, merchandise inventory was insufficient, which also affected terminal sales.

The development of the retail industry continued to be under pressure in the first half of 2022 because of the pandemic, with total retail sales of consumer goods declining by 0.7% year on year. According to statistics from the China National Commercial Information Center, the merchandise retail sales of the country's 100 large retail enterprises in the first half dropped by 14.1% year-on-year.

Gross profit improvement was an important reason for the shrunken losses. The financial report showed that in the first half of the year, Suning's comprehensive gross profit margin improved by 9 percentage points, of which the gross profit margin of the main business increased by 4.82 percentage points. Selling expenses, management expenses, and R&D expenses fell by about 48%.

Since the second quarter of 2021, Suning's liquidity pressure has been obvious. Difficulties occurred in the payment of procurement settlement funds, and the scale of merchandise inventory fell sharply to a historical low, causing operations to come to a halt. Operating cash flow in the third and fourth quarters was -4.5 billion yuan (-$665.6 million) and -6.4 billion yuan (-$946.6 million). 2021 annual revenue fell 45% year-on-year, and the net loss was 43.265 billion yuan ($6.4 billion).