Deliveroo sees first-half losses spike as it plans exit from Netherlands

LONDON • Deliveroo, the delivery food app, announced yesterday a big increase in losses as investment costs ate into rising revenues, adding that it planned to exit its struggling Dutch market.

Loss after tax jumped 41 per cent to £153.8 million (S$256 million) compared with the first six months of last year, the British group said in a statement.

Revenue grew 12 per cent to £1 billion despite easing Covid-19 curbs and controversy over treatment of its riders.

Deliveroo said the outlook was clouded by strong inflation and the Ukraine war.

However, company founder and chief executive Will Shu expressed confidence in the company's ability "to adapt financially to any further changes in the macroeconomic environment".

Deliveroo said it "proposes to consult on ending its operations in the Netherlands", noting it did "not hold a strong local position" in the country.

A planned exit from the Netherlands in November follows Deliveroo's departure from Spain last year, although the group yesterday said it had gained market share in the United Kingdom and Italy.

Marketing and other investment costs, including spending on technology, jumped 29 per cent to almost £369 million in the first half.

Deliveroo has enjoyed strong sales growth in a short space of time but faces questions over its sustainability, highlighted by its failed stock market debut that took place in London last year.

"Stay-at-home stocks like Deliveroo fared extremely well... when restaurants and bars were shut and households were forced into lockdown," said Interactive Investor's investment head Victoria Scholar.

"However, the reopening of the economy, combined with stiff competition from the likes of Just Eat and Uber Eats and quick-commerce players such as Gorillas and Gopuff, as well as the cost-of-living crisis, has created an extremely challenging environment."

AGENCE FRANCE-PRESSE