Grab Holdings reported its first quarterly profit on Thursday (Feb 22) and unveiled a maiden share repurchase program, but the ride-share and food-delivery firm’s weak annual sales forecast fanned growth worries and weighed on its shares.
While the Singapore-based company’s ride-share growth hit pre-pandemic levels in 2023, its food-delivery services are rebounding from a slowdown following a boom during the lockdown.
“There will be revenue acceleration in the years beyond 2024 as investments in our new products bear fruit,” chief financial officer Peter Oey told Reuters.
He said Grab was building premium offerings in its mobility and delivery services that could generate high-value transactions.
US-listed shares of Grab, which also said it expects an annual adjusted core profit, were down 2 per cent at US$3.38 in early trading.
The company forecast fiscal 2024 revenue between US$2.70 billion and US$2.75 billion, compared with analysts’ average estimate of US$2.80 billion, according to LSEG data.
Grab said on Thursday it would repurchase US$500 million worth of class A ordinary shares and announced an early payment of the remainder of a term loan. This followed global peer Uber announcing its first-ever share buyback last week.
Grab also projected full-year adjusted core profit of US$180 million to US$200 million, compared with estimates of US$135.2 million.
The company’s fourth-quarter revenue of US$653 million beat estimates of US$629 million. Revenue rose 26 per cent in its mobility business on holiday quarter travel demand, while it increased 20 per cent in its delivery unit.
Grab posted a net income of US$11 million in the fourth quarter, helped in part by a “reversal of an accounting accrual”.
The company delivered its first adjusted core profit in its fiscal third quarter, aided by workforce reduction and cut to some incentives and technology costs over the past two years.
