(Reuters) -Grab Holdings Ltd, Southeast Asia’s biggest ride-hailing and food delivery firm, on Thursday forecast upbeat 2023 revenue and pulled forward its profitability timeline on hopes that consumers will continue to rely on its services.
New York-listed shares of a decade-old Grab, a household name in eight Southeast Asian countries, gained 6% in premarket trading.
Grab and rivals such as Indonesia’s PT GoTo Gojek Tokopedia Tbk and Uber benefited from higher demand for delivery services during the COVID-19 pandemic, while consumers have relied on the app for their daily commute as offices reopened and travel resumed.
The Singapore-based company is now scaling back on promotions, incentives to drivers, and is improving its cost structure to focus on profitability, while it will also implement several measures such as a hiring pause, salary freezes for senior managers and cuts in travel and expense budgets.
“This sets us up for a strong 2023 as we continue to focus on growing in a sustainable manner,” Chief Financial Officer Peter Oey said.
Still, Grab expects the ride-hailing business to return to pre-pandemic levels by the end of the year.
The company forecast its 2023 revenue between $2.20 billion and $2.30 billion. Analysts expect Grab’s annual sales to scale $1.97 billion, according to Refinitiv data.
Grab also brought forward its forecast for group break-even on an adjusted core earnings, or EBITDA basis, to the fourth quarter of 2023 from a previous target of the second half of 2024.
For the year, Grab forecast loss before interest, taxes, depreciation, and amortization between $275 million and $325 million. The metric, keenly watched by investors as a measure of profitability, was $793 million for 2022.
Grab also delivered an about four-fold revenue surge in the fourth quarter to $502 million, helped by higher demand and a reduction in incentives.
(Reporting by Nivedita Balu in Bengaluru; Editing by Sherry Jacob-Phillips)