Grab sets a free cash flow target and posts the first adjusted core profit. Grab Holdings (GRAB.O) posted its first-ever adjusted core profit in the third quarter and anticipates free cash flow next year thanks to solid demand for its food delivery and ride-share services.
After exceeding analysts’ estimates for quarterly sales and full-year core loss, the business’s share price increased by almost 6% in premarket trading. The company is one of the leading online companies in Southeast Asia.
In an interview, the Chief Financial Officer, Peter Oey, stated that the company will continue to balance its expansion and profitability. Grab intends to generate free cash flow and aims for this “towards the end of the following year,” according to Oey.
According to the figures provided by LSEG, revenue increased by 61% to $615 million, which was higher than the analysts’ expectation of $590.6 million. Despite this, the growth rate for the third quarter was the lowest it has been in at least the previous five quarters. According to the firm, Grab successfully attracted clients for its food delivery service by offering cheaper delivery pricing, and the demand for its ride-share service was backed by more excellent tourism-related trips.
According to estimations provided by Visible Alpha, sales from the food delivery industry, which is the company’s most important, increased by 79%. The growth in income from ride-sharing services was 31%, which was more significant than predicted.
For the three months that concluded on September 30th, Grab recorded an adjusted EBITDA of $29 million. This figure represents profits before interest, taxes, depreciation, and amortization.
At the beginning of this year, the business made public its intention to reduce operating expenses by announcing a substantial organizational overhaul. Among the proposed cost-cutting measures were reductions in the company’s cloud bill and customer and employee incentives.
The firm carried out its most significant wave of layoffs since the beginning of the epidemic in June, cutting over 1,000 posts, corresponding to approximately 11% of its personnel.
Compared to its previous projection of between $2.2 billion and $2.3 billion, Grab’s current revenue projection for 2023 is between $2.31 billion and $2.33 billion. This is an increase from $2.2 billion to $2.3 billion.
In past periods, the full-year adjusted core loss range was between $30 million and $40 million, but it has now been reduced to between $20 million and $25 million.