Grab Holdings Ltd, Southeast Asia’s largest food transportation and delivery company, expects to beat its adjusted EBITDA by the second half of 2024 as it accelerates towards profitability, company officials said on Tuesday. Its group adjusted EBITDA loss is expected to be $380 million in the second half of 2022, a 27% improvement compared to the first half of the year.
“Our cash position is not something we take for granted. We will maintain a prudent stance on how we allocate and deploy our capital with this cash preservation in mind,” Grab chief financial officer Peter Oey told analysts at Grab’s first investor day. Grab also said it expects group revenue to grow 45% to 55% year-on-year in 2023 on a constant currency basis.
It also expects to break ground on its digibanking operations by 2026. Grab, which listed on Nasdaq in December after a record-breaking merger with a $40 billion blank check company, has been under pressure from investors to stem losses from its decade-old business.
Shares in Grab have fallen 61% so far this year, tracking a global rally in tech valuations as investors reassess growth prospects amid rising interest rates and slowing economies. “We’ve been firing on all cylinders to improve our profitability trajectory and deliver sustainable growth, and the new targets we’ve shared today reflect that,” said Anthony Tan, CEO and co-founder.
In an interview, Grab said the company does not anticipate having to make mass layoffs, as some competitors have done, and is hiring selectively while reining in its financial services ambitions. Last month, Grab reported a narrower second-quarter loss of $572 million from $801 million a year earlier. But it cut its gross merchandise volume outlook for this year, blaming the strong dollar and weakening demand for food supplies.
Grab operates in 480 cities in eight countries and has more than five million registered drivers and more than two million merchants on its platform. Like its competitors, such as Indonesia’s biggest tech firm GoTo, Grab has benefited from the explosion of food delivery services during the COVID-19 pandemic, but its core ride-hailing business has suffered and is still not back to pre-Covid levels.
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