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Singapore’s Grab posts first adjusted core profit

BENGALURU – Grab Holdings on Thursday reported an adjusted core profit for the third quarter – its first – driven by cost-reduction measures and strong demand for its food delivery and ride-share services.

Shares of the company, one of South-east Asia’s largest Internet firms, were up about 6 per cent in pre-market trading after a beat on quarterly revenue and smaller full-year core loss expectations.

“We’re going to continue to balance growth and profitability,” Grab chief financial officer Peter Oey said in an interview. The firm is targeting to deliver free cash flow and aims to do so “towards the end of next year”, he added.

Revenue jumped 61 per cent to US$615 million (S$835 million), beating analysts’ estimate of US$590.6 million, according to London Stock Exchange Group 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 per cent, in line with estimates from financial market analysis firm Visible Alpha. Ride-share revenue grew by a better-than-expected 31 per cent.

Grab reported adjusted earnings before interest, taxes, depreciation and amortisation of US$29 million for the third quarter ended Sept 30.

Earlier in 2023, it 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 per cent of its workforce, in its biggest round of layoffs since the start of the pandemic.

Grab now expects 2023 revenue in the range of US$2.31 billion to US$2.33 billion, compared with its earlier forecast of between US$2.2 billion and US$2.3 billion.

The range for full-year adjusted core loss is now US$20 million to US$25 million, compared with between US$30 million and US$40 million earlier.

Grab listed on the Nasdaq in December 2021 through a merger with a special purpose acquisition company. REUTERS

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