Singapore-based tech group Grab is trimming losses as the company captures stronger demand from tourists visiting its Southeast Asian markets and continues with aggressive cost cutting.
The Nasdaq-listed company on Thursday reported a USD 250 million net loss for the January-March quarter, narrowing 43% from a USD 435 million loss in the corresponding period of the previous year.
“This quarter, we reported another solid set of results, which reflects our disciplined focus to drive sustainable growth and profitability,” CEO Anthony Tan said during an earnings call.
Group revenue totaled USD 525 million, up 130% on the year. Grab’s core ride-hailing business rose 72% to USD 194 million, as the company added drivers across the region and benefited from the recovery in traveler demand.
“Mobility demand continues on a positive trajectory,” Tan said. “We are optimistic about further recovery in the tourism segment, especially with China’s reopening.”
Alex Hungate, Grab’s chief operating officer, noted that airport rides rose 133% on the year and 7% quarter-on-quarter, with “ample room to recover further,” as the company said it is still at only 69% of the pre-pandemic level.
The company expects gross merchandise value (GMV) — the total value of transactions made through Grab’s platform — for the mobility segment to reach pre-pandemic levels by the October-December quarter.
Since going public in December 2021, Grab has worked to shift away from a strategy that depended on heavy sales and promotion expenses to draw customers and usage, resulting in years of losses.
On Thursday, Grab maintained its outlook to break even on a group level in the final quarter this year on an adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) basis.
Yet, the company faces more headwinds in deliveries, its largest business segment. Transaction value is slowing as more people dine out since regional economies began to reopen last year.
Grab’s revenue for deliveries totaled USD 275 million, up 203%. But this was mainly due to the purchase of Malaysian high-end supermarket chain Jaya Grocer.
GMV for the segment was USD2.34 billion, down 9% from a year ago when demand was stronger due to pandemic restrictions. Grab also noted seasonal headwinds due to the first Lunar New Year without pandemic restrictions and the earlier Ramadan fasting season.
Peter Oey, chief financial officer, said Grab expects delivery transactions to pick up from the second quarter, as the company expands its service functions. The company has rolled out saver features across more markets, where it offers a lower delivery fee to users in exchange for a slightly longer delivery time.
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The company also aims to get more active users through GrabUnlimited, its monthly subscription program. During the January-March quarter, Grab said, these users accounted for over one-quarter of deliveries and spent 270% more than non-subscribers.
Grab’s share price was down 12% at one point in early trading in New York.
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.