© Reuters. FILE PHOTO: A man walks past a Grab office in Singapore March 26, 2018. REUTERS/Edgar Su
By Yuvraj Malik
(Reuters) -Grab Holdings on Thursday reported its first ever adjusted core profit in the third quarter and predicted free cash flow next year, driven by strong demand for its food delivery and ride-share services.
Shares of the company, one of Southeast Asia’s largest internet firms, were up about 6% in premarket trading after a beat on quarterly revenue and smaller full-year core loss expectations.
“We’re going to continue to balance growth and the profitability,” Chief Financial Officer Peter Oey said in an interview. Grab aims to deliver free cash flow and is targeting “towards the end of next year”, Oey added.
Revenue jumped 61% to $615 million, beating analysts’ estimate of $590.6 million, according to LSEG data. Still, the third-quarter growth rate was the lowest in at least the last five quarters.
Grab attracted food customers with lower delivery prices and the demand for its ride-share service was supported by higher tourism-related travel, the company said.
Sales from the food delivery business – its largest – grew 79%, in line with estimates from Visible Alpha. Ride-share revenue grew a better-than-expected 31%.
Grab reported adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $29 million for the third quarter ended Sept. 30.
Earlier this year, the company announced a major restructuring to lower costs, with measures including cuts to its cloud bill and consumer and worker incentives.
In June, the company reduced around 1,000 roles, or about 11% of its workforce, in its biggest round of layoffs since the start of the pandemic.
Grab now expects 2023 revenue in the range of $2.31 billion to $2.33 billion, compared with its earlier forecast of between $2.2 billion and $2.3 billion.
The range for full-year adjusted core loss is now $20 million to $25 million, compared to between $30 million and $40 million earlier.
