(Bloomberg) — MercadoLibre, Inc. The company’s strong expansion into credit throughout Latin America impacted profits in the third quarter. The e-commerce and fintech giant increased its total credit portfolio by 77% year-over-year to $6 billion, with the share related to credit cards rising by 50.73% during the same timeframe, as stated in a release. Provisions allocated for lending reduced net income, which amounted to $397 million, missing the $513 million average forecast from analysts surveyed by Bloomberg. Additionally, the company boosted investments in logistics during the quarter, launching five new fulfillment centers in Brazil and one more in Mexico, according to Chief Financial Officer Martin de los Santos in an interview prior to the earnings announcement. Total revenue reached $5.3 billion, in line with expectations. “This quarter experienced significant growth, but we also invested in several key initiatives, one of which is credit,” de los Santos stated. The credit card plays a crucial role in our financial technology strategy. Although it likely creates “some margin pressure annually,” the company sees it as “the right investment for long-term growth potential,” he mentioned. MercadoLibre’s stock has risen by 35% this year, making it the most valuable company in Latin America with a market cap of $107 billion. Although its commerce segment accounts for approximately 60% of revenue, the company is making significant strides in financial services via its Mercado Pago division, which handles payment processing, lending, and providing deposit accounts with interest rates above the market average. The number of users for its commerce division increased to 61 million, while Mercado Pago reached 56 million monthly active users. The gross merchandise value for the quarter was $12.9 billion, with Brazil and Mexico experiencing growth rates of 34% and 27%, respectively, when measured in local currency.
