Uber expects up to US$2.2b impairment charge, drop in quarterly revenue due to pandemic

[NEW YORK] Uber Technologies said on Thursday it expects an impairment charge of up to US$2.2 billion (S$3.13 billion) in the first quarter due to the coronavirus outbreak and revenue to decline by US$17 million to US$22 million in the quarter.

Last month, the ride-hailing company promised 10 million free rides and food deliveries to healthcare workers, seniors, and people in need, during the period of lockdowns put in place to stem the spread of the coronavirus.

The company withdrew its 2020 forecast for gross bookings, adjusted net revenue and adjusted EBITDA, and said the initiatives taken in response to the outbreak, including financial assistance for drivers and delivery people, would be accounted into its first and second quarter revenue.

It expects GAAP revenue to fall by about US$17 million to US$22 million in the first quarter, and by about US$60 million to US$80 million in the second quarter.

Uber said the impairment charge would be against the carrying value of some of the company's minority equity investments, due to the impact of the pandemic on the estimated value of those entities.

The investments will be reduced by an estimated range of US$1.9 billion to US$2.2 billion during the first quarter ended March 31, the company said.

Shares of Uber were up about 6.6 per cent in extended trading.

The company is expected to report results for the first quarter on May 7.

REUTERS