Singapore’s tech ride-sharing and food delivery company Grab’s logo is displayed on a smartphone screen.
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Singapore-based food delivery service giant Catch Losses and break-even in the delivery department shrank for the first time since 2012, during the third quarter.
The company reported an adjusted EBITDA loss of $161 million, which is a 24% improvement from an adjusted EBITDA loss of $212 million in the year-ago period. EBITDA is a measure of profitability that shows earnings before interest, taxes, depreciation, and amortization.
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Grab offers a range of services including delivery, food delivery, package delivery, grocery delivery, and mobile payments through GrabPay.
The company said its delivery business exceeded expectations by three quarters, “primarily due to improved incentive spending and Jaya Grocer’s contributions.” in january, Grab has acquired a majority stake in Malaysian luxury supermarket chain Jaya Grocer to accelerate its expansion into grocery delivery.
Food deliveries also reported positive adjusted earnings in the third quarter, two quarters ahead of its previous guidance.
“We achieved core food deliveries and gross deliveries adjusted for EBITDA segments prior to guidance while significantly reducing gross loss for the period. We achieved this by remaining focused on our cost structure and incentives,” Anthony Tan, co-founder Grab Corporation and Group CEO, in a statement.
US-listed Grab shares rose 0.64% to close at $3.15 a piece in Wednesday trading, outperforming the S&P 500 and Nasdaq Composite, which fell 0.83% and 1.54%, respectively.
Grab went public in December 2021 after the SPAC merger closed. The stock is down 56% since the start of the year.
Driving towards profitability
Grab Partners average monthly active drivers in the quarter were 80% of pre-Covid levels. The company also said incentives eased to 9.4% of the GMV, compared to 11.4% for the year-ago period and 10.4% for the prior quarter.
“This demonstrates our commitment to grow profitably and sustainably,” said Tan.
Grab raised its full-year forecast and now expects revenue between $1.32 billion and $1.35 billion, up from the previous range of $1.25 billion to $1.30 billion. It also revised its adjusted EBITDA forecast for the second half of the year and now expects a loss of $315 million, better than the $380 million it previously projected.
“We will aim to better optimize our cost structure by reducing discretionary spending,” Grab CFO Peter Oey said during the media conference.
He added, “We have begun to pause or slow down hiring across the company. We are also adjusting for cost optimization in non-headcount overhead.”