Singapore’s Grab says ‘laser-focused’ on profitability after bumper quarter
Aug 25 (Reuters) – Singapore’s Grab Holdings Ltd on Thursday lifted the lower end of its revenue forecast for the year and said it was “laser-focused” on profitability as demand for rideshare across Southeast Asia peaks.
U.S.-listed shares of Grab, which went public last year after a $40 billion merger with a blank-check firm, surged about 5% in premarket trading.
“We are laser-focused on accelerating our path to profitability,” said Chief Executive Officer Anthony Tan.
“We will get there by doubling down on product innovation that increases user engagement and reduces our cost-to-serve and focusing on growing high quality transactions on our platform.”
The company plans to cut back on incentives and promotions to lure drivers and users, while exiting unprofitable businesses and slowing hiring to save costs.
However, a strong dollar and a slowdown in Grab’s delivery business as consumers return to dining outdoors could hurt gross merchandise volume (GMV), a measure of transaction volume, which is expected to slow in the second half even as core profit is expected to improve amid cost cuts.
The company, which operates in 480 cities in eight countries in Southeast Asia, forecast revenue between $1.25 billion to $1.3 billion for the year, compared with its prior range of $1.2 billion and $1.3 billion.
For the second quarter, revenue surged 79% to $321 million.
Revenue at the Rideshare business rose 40% while that of Deliveries tripled.
Loss for the period narrowed to $572 million, from $801 million a year earlier.
In the United States, both Uber (UBER.N) and Lyft (LYFT.O) have benefited from a surge in demand as worries of supply eased with more drivers signing up to make additional income to combat the high cost of living.
Reporting by Nivedita Balu in Bengaluru; Editing by Krishna Chandra Eluri