Grab Says Growth Will Slow As It Aims To Break Even By Second Half 2024
Anthony Tan, cofounder of Grab, at the company’s office in Singapore in June 2021.
WEI LENG TAY/BLOOMBERG
Grab Holdings said it’s aiming to breakeven by the second half of 2024 on an adjusted earnings basis before interest, taxes, depreciation and amortization, although the growth of its business is slowing.
“We’ve been firing on all cylinders to improve our profitability trajectory and deliver growth in a sustainable manner and the new targets we’ve shared today reflect that,” said Anthony Tan, Grab cofounder and group CEO, said at the company’s first investor day.
Grab projected its losses to narrow to $380 million on an adjusted basis in the second half of the year, after reporting a loss of $580 million in the first half. The company’s net loss for 2021 was $3.4 billion.
Grab was established 10 years ago, but it’s never managed to turn a profit. Grab’s shares have lost more than 70% of their value since going public on Nasdaq through a merger with Altimeter Capital Management’s SPAC (special purpose acquisition company).
The Singapore-based company said its revenue would grow 45-55% in 2023 on a constant currency basis, which is slower than its forecast for the current year.
Grab’s mainstay ride-hailing business has not yet recovered to its pre-pandemic levels and the company’s food deliveries have moderated following the lifting of restrictions. Tan had sought to expand Grab’s offerings into a range of other businesses, such as grocery deliveries, payment services, banking and hotel bookings, but the company said on Tuesday that it has been shutting down unprofitable units.
“We will continue to look for opportunities to reduce cost structure but at the same time also we’ll continue to reinvest towards R&D and tech development to support the sustainability of our ecosystem. So, we remain very confident in getting to the second half of 2024 to break even as a business,” Peter Oey, Grab’s CFO said.
Oey said the company has a very strong net cash position of over $6 billion today, yet aims for cautious spending and to cut costs. “We’re living in a time where cash is scarce. There’s a lot of unknown out there in the marketplace,” he added.
Grab has also recently launched a digital bank—called GSX Bank—in Singapore in partnership with Singtel, and has plans to launch two more banks in Indonesia and Malaysia next year. Grab said on Tuesday that it expects the bank to break even by 2026.
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