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A participant passes a banner with the Grab logo before the bell ringing ceremony when Grab begins trading on Nasdaq in Singapore on Thursday, Dec. 2, 2021.
Ore huiying | Bloomberg | getty images
Singapore – to pounce The Southeast Asian ride-hailing giant said in its fourth-quarter earnings report Thursday that it recorded its first profitable quarter, with a profit of $11 million.
This compares with a loss of $391 million recorded in the same period a year earlier. “The increase was primarily due to an improvement in group adjusted EBITDA, fair value changes in investments and a decrease in share-based compensation expense,” the company said.
Revenue for the quarter reached $653 million, exceeding LSEG analysts’ estimates of $634.86 million.
The deficit for full-year 2023 widened to $485 million, down 72% from $1.74 billion a year earlier.
In addition to ride-hailing, the company also offers financial services such as payments and insurance, as well as delivery of food, groceries, and packages.
“We went out [2023 with] Mobility is higher than pre-Covid levels. “We are seeing very strong demand in the mobility sector,” Grab CFO Peter Oey told CNBC in an exclusive interview on Friday, adding that tourism is “growing a lot.”
“If you look at the delivery business, we have another record year-over-year growth of 13%. We also now have more users on our platform at the same time,” he said on CNBC’s “Squawk.” “The pass has really strong speed.” Box Asia.”
Grab announced on Thursday that it will repurchase $500 million worth of Class A ordinary shares for the first time.
Grab remained largely unprofitable during its years of operation, incurring billions of dollars in losses since its inception in 2012.
In the early years of business, tech startups prioritize growth over profitability, which usually means spending lots of cash. But with growth slowing due to global macro uncertainties, they have been forced to refocus their focus on profitability and be more prudent with costs.
Grab said in its report that during the fourth quarter, total incentives – which include partner and consumer incentives – were reduced to 7.3% of the total value of goods sold. This compares with 8.2% in the same period a year earlier “as we continue to improve the health of our market.”
Grab had been offering incentives to attract drivers and passengers to its platform, but this is now tapering off as the company takes steps to increase profitability.
Asked whether Grab would reach a time where it would not need to incentivize people to stay on the platform, Oye said incentives would “always be a lever” for the business.
“I don’t think we’re going to see a world where there is no stimulus,” he told CNBC. He said the incentives help “ensure an adequate supply” of drivers and attract price-sensitive customers.
For 2024, Grab expects revenue to come in between $2.70 billion and $2.75 billion, below LSEG analysts’ consensus of $2.8 billion.
Grab shares closed 8.41% lower on Thursday. Its share price has fallen 75.8% from its opening price of $13.06 in December 2021, when the company first listed on Nasdaq.
