Grab, a Singapore-based ride-hailing and food delivery giant has managed to reduce losses and break even in its deliveries segment in the third quarter, the first time since 2012. The company provides services that include ride-hailing, food delivery, package delivery, grocery delivery, and mobile payments powered by its GrabPay.
Grab reported adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of $161 million in the third quarter. This is a 24 percent improvement from the $212 million it reported a year ago.
The company noted that its delivery business broke even three quarters ahead of expectation, “primarily due to optimization of our incentive spend, and contributions from Jaya Grocer.” Gran acquired a majority stake in supermarket chain company Jaya Grocer in January with the goal of accelerating its expansion into grocery delivery.
The company’s food delivery segment wasn’t left out. Food deliveries reported positive adjusted EBITDA in the third quarter, also two quarters ahead of its previous guidance.
In a statement, Group CEO and co-founder Anthony Tan said that “We achieved core food deliveries and overall deliveries segment-adjusted EBITDA breakeven ahead of guidance while narrowing our overall loss for the period significantly. We accomplished this by staying laser-focused on our cost structure and incentive.”
The company’s US-listed shares soared 0.64 percent to close at $3.15 per share on Wednesday, outperforming the S&P 500 and Nasdaq Composite which were down 0.83 percent and 1.54 percent respectively.
Grab, which went public in December 2021 after closing its SPAC merger, has seen its stock decline 56 percent year to date.
In the third quarter, the company’s monthly active driver-partners reached 80 percent of what was recorded in the pre-covid period. It also added that incentives declined to 9.4 percent of GMV, compared to 11.4 percent a year ago and 10.4 percent in the second quarter. “This demonstrates our commitment to growing profitably and sustainably,” Anthony Tan said.
The company also increased its full-year forecast. It now expects revenue to come in between $1.32 billion and $1.35 billion, up from the prior range of $1.25 billion to $1.30 billion. Gran also adjusted its EBITDA outlook for the second half of the year. It now expects a loss of $315 million, improved from the $380 million it initially projected.
“We will aim to better optimize our cost structure by limiting discretionary spending. We began pausing or slowing hiring in various corporate departments. We’ve also been disciplined to optimize costs in non-headcount overheads,” CFO Peter Oey said.
Ibhadojemu Lucky Emmanuel is a graduate of Education and Economics from the University of Benin. He has a passion for tech and business and has been writing professionally for over a period of five years. He's written across various topics and segments and knew tech-business was it when he first stumbled on it. He has a great passion for music and arts, and wants to visit as many countries as he can someday.
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