Poland’s Allegro books 2.3 billion zloty writedown on Mall Group and WE|DO

GDANSK (Reuters) -Polish e-commerce company Allegro has booked a 2.29 billion zloty ($511.8 million) impairment on the value of Czech online retailer Mall Group and logistics company WE|DO, which it bought last year.

The non-monetary impairment will lower Allegro’s third-quarter net profit but not affect its operational stability and business priorities, the company said.

“Looking back, the price (for the Czech companies) was set at the peak of a market cycle, and since then many publicly listed e-commerce companies have lost 50-70% of their market value,” Allegro said in a market filing, adding that inflation and a cost-of-living crisis has meant Mall and WE|DO’s results have been significantly worse than initially expected.

Shares in Allegro were down 4.5% at 1330 GMT.

($1 = 4.4743 zlotys)

(Reporting by Maria Gieldon and Patrycja ZarasWriting by Karol BadohalEditing by David Goodman)