Shares in Grab tumbled 37 per cent on Thursday after Southeast Asia’s no. 1 ride-hailing and food delivery firm posted a wider quarterly loss and a worse-than-expected drop in revenue, hit by promotional offers and higher driver incentives.
Singapore-based Grab said it had invested aggressively in improving incentives to attract drivers as ride-share demand recovered from pandemic lows.
Grab’s revenue fell 44 per cent to US$122 million in the fourth quarter, well below the average analyst estimate of $167 million, according to Refinitiv data. Its loss widened to $1.1 billion, including expenses related to Grab’s listing, versus a loss of $635 million a year earlier.
Shares of Grab, which was reporting its first quarterly earnings since going public in December, skidded to their lowest ever. They have lost nearly three-quarters in value since their debut.
Chief Financial Officer Peter Oey said in an interview that demand for drivers has shot up and the company was still catching up in terms of supply.
Revenue from Grab’s delivery unit, which focuses on food delivery services in countries including Singapore and Malaysia, was almost wiped out, plunging 98% as the company poured money into incentives to retain its market leader position, and more people dining out hurt demand.
Revenue in its mobility unit, which accounted for 86% of overall sales, declined 27 per cent in the quarter.
Founded in 2012 as a regional taxi app in Malaysia, SoftBank Group-backed Grab operates a “super app”, which provides ride-hailing, food and grocery delivery, mobile banking and payments in Southeast Asia.
The company, which combined with blank check firm Altimeter Growth Corp in a $40 billion merger last year and went public in December, is facing rising competition from other “super apps” such as Gojek in Indonesia.
- Reporting by Nivedita Balu in Bengaluru and Sayantani Ghosh; Editing by Shinjini Ganguli and Kenneth Maxwell, of Reuters/