Grab raises full-year 2024 core profit forecast as Q1 net loss narrows
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For the quarter ended March 31, the company’s revenue rose 24 per cent to US$653 million, higher than analysts’ estimates.
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BENGALURU - Grab Holdings raised its full-year profit forecast on May 15, underscoring gains from recent cost reduction measures and growth in its ride-share and food delivery businesses.
A significant restructuring at Grab, which included reducing 1,000 jobs and slashing some technology costs in 2023, is helping the company push ahead in its goal to deliver positive free cash flow in 2024.
The company now expects adjusted core profit between US$250 million (S$336 million) and US$270 million, compared with its earlier forecast of US$180 million to US$200 million.
Grab kept its full-year revenue forecast range unchanged at US$2.7 billion to US$2.75 billion.
For the quarter ended March 31, Grab reported a net loss of US$115 million, narrowing 54 per cent from its loss of US$250 million in the same period a year ago.
The group’s adjusted core profit (earnings before interest, taxes, depreciation and amortisation) stood at US$62 million for the quarter, as opposed to a loss of US$67 million in the previous year. It topped the US$29.7 million analysts had predicted.
Grab said its adjusted profit was due to growth in on-demand gross merchandise value (GMV) and revenue, and lower regional corporate costs.
It marked the ninth straight quarter of sequential improvement in adjusted core profit.
Revenue rose 24 per cent to US$653 million, higher than analysts’ estimates of US$642.4 million, per London Stock Exchange Group data.
Sales from the food delivery business – its largest – grew 19 per cent, and the ride-share business 27 per cent, both topping analysts’ consensus estimates from Visible Alpha.
The Singapore-based company is trying to reach sustained profitability after years of spending to grow its market share and fend off competition.
Yet, Indonesia’s GoTo Group is proving a tough rival, keeping prices low and margins thin for both companies as they battle it out in the South-east Asian market of hundreds of millions of people.
The company is betting new initiatives, including digital banking, will boost its earnings going forward. Grab, which has partnered with financial services firms for online lending and banking in Malaysia and Singapore, expects revenues from those businesses to increase in the coming years.
Mr Anthony Tan, co-founder and group chief executive of Grab, said: “Our focus on product-led growth is bearing fruit, with on-demand GMV scaling to new highs in spite of the seasonal impact we usually see in the first quarter of the year.
“Our push on affordability and reliability is pulling more people onto our platform and driving up order frequency. We also continue to see our partner earnings trending up.”
New York-listed Grab shares rose 1.7 per cent to US$3.66 in after-hours trading on May 15, after the release of the company’s results.
The shares are still down about two-thirds since Grab went public through a deal with a US blank-cheque company in late 2021. REUTERS, BLOOMBERG
