Grab narrows losses to US$148 mil for 2QFY2023; raises FY2023 ebitda forecast

Grab has revised its group adjusted ebitda guidance range up by US$165 million to US$195 million for FY2023.

Grab Holdings has narrowed losses for its 2QFY2023 ended June 30 to US$148 million ($201 million), a 74% improvement over its losses of US$572 million for the corresponding period last year.

The loss for the quarter was primarily due to the improvement in group adjusted ebitda and a reduction in fair value losses on investments, net interest expenses and share-based compensation expenses.

As such, the company has revised its group adjusted ebitda guidance range up by US$165 million to US$195 million, to a loss of US$30 million to US$40 million for its FY2023. Grab adds that it is on track to achieve group adjusted ebitda breakeven in 3QFY2023, ahead of its previous target of 4QFY2023.

Grab’s group adjusted ebitda came in at negative US$20 million for 2QFY2023, an improvement of 92% compared to negative US$233 million for the same period in 2022 as the company continued to grow its gross merchandise value (GMV) and revenue while improving profitability on a segment adjusted ebitda basis and lowering regional corporate costs.

Group adjusted ebitda margin in 2QFY2023 came in at negative 0.4%, an improvement from the negative 4.6% in the second quarter of 2022 and negative 1.3% in the first quarter of 2023.

With these results, Grab has recorded sequential improvements in group adjusted ebitda on a quarter-over-quarter basis for six consecutive quarters.

Grabs’s loss for the quarter included US$65 million in non-cash share-based compensation expenses and a US$50 million restructuring charge that largely consisted of costs from the restructuring exercise that was conducted in June.

For the period, Grab’s revenue grew 77% year-over-year to US$567 million, thanks to a business model change implemented in 4QFY2022 that created an uplift for its deliveries revenues in 2QFY2023.

Grab’s total GMV grew 4% y-o-y in the quarter, or 6% y-o-y on a constant currency basis, attributed to the growth in mobility and deliveries GMV as well as its monthly transacting users (MTUs) increasing by 7% y-o-y.

The company notes that its 2QFY2023 group MTUs and deliveries GMV were at all-time highs.

Meanwhile, Grab’s regional corporate costs for the quarter were US$192 million, compared to US$214 million in 2QFY2022 and US$216 million in QFY2023, with the company claiming to have driven “greater cost efficiencies” across the organisation.

Grab announced that it would be cutting 1,000 jobs in June in order to stay competitive.

Variable expenses declined 31% y-o-y and 18% q-o-q from increased operational efficiencies, specifically driven by lower cloud and direct marketing costs. Staff costs declined 6% y-o-y and 13% q-o-q, attributable to lowered headcount levels across various functions including technology and development, marketing, and general and administrative functions.

Additionally, 2QFY2023 saw certain fixed cost reversals recognised from the restructuring exercise conducted in June.

Grab’s net cash liquidity totaled US$4.9 billion as at June 30, compared to US$5.0 billion at its 1QFY2023 ended March 31.

“We had a strong set of results for the second quarter. Deliveries GMV grew y-o-y to hit record-highs, supported by our continued push on key affordability initiatives and an expanding GrabUnlimited subscriber base. More people are using Grab today than ever before, as we achieved our highest MTUs to date,” says CEO Anthony Tan.

“Looking ahead, we will focus on making our platform more valuable to our driver- and merchant-partners, by providing them with tools and services to become more productive and engaged. Our aim is to continue fostering a flourishing ecosystem that enables them to thrive, while delivering sustainable growth for Grab,” he adds.

As at 7.43pm (SGT), Grab shares were trading 7 US cents or 2.14% up on the NASDAQ.

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