Financially challenged global buy now pay later provider Klarna has revamped the board of its Australian operation for the second time in less than a year.
According to filings lodged with ASIC by Klarna Australia Holdings Pty Ltd on Monday, senior marketing executive Katrina Ang has resigned as a director after serving less than a year on the board.
Ang was appointed to the board in November last year along with Klarna’s global chief operating officer, Camilla Giesecke who continues as a director of the Australian business.
Klarna has replaced Ang on the board of the Australian holding company with Professor Bruce Cowley, who also currently serves as a director of the 2.2 million member Australian Retirement Trust.
It’s a case of back to the future for Cowley who previously served on the Klarna Australia board between June 2021 and November last year.
Mystery surrounds the recent financial performance of Klarna’s local operating arm – Klarna Australia Pty Ltd - after it reported a net loss of $56 million in the 12 months to the end of December 2021, which left its balance sheet with a net asset deficiency of $70 million.
The gravity of Klarna’s poor performance in Australia in 2021 was underlined by disclosures that the company earned only $3.1 million in merchant and consumer commission revenue after spending $27 million on marketing.
Klarna’s board advised ASIC in April that it would not file local accounts to the regulator in 2022 on the grounds that its parent no longer constituted “a large group of companies”.
E&Y partner Michael Byrne observed in his 2021 audit opinion that the existence of the operating losses and the net asset deficiency indicated there was a material uncertainty “that may cast significant doubt on the group’s ability to continue as a going concern”.
When the 2021 accounts were being prepared, the directors of Klarna’s Australian entities decided to continue trading as a going concern after receiving a letter of support from the Swedish parent, Klarna Holding AB.
However, the global operations of Klarna have also continued to rack up fat losses, despite recent improvements in revenue generation and cost control.
Klarna’s global business posted a net loss of US$1 billion for the 12 months to the end of December.
In the first three months of 2023, the group appeared to stem some of the bleeding after it reported a net loss of US$120.7 million.
The first quarter result equated to a halving of the loss recorded in the previous corresponding period.
Klarna CEO Sebastian Siemiatkowski said in May that he expected the company to begin making “monthly profits” in the second half of 2023.