Grab cuts Q1 loss to US$250 million, bumps up adjusted Ebitda guidance
GRAB reported a loss of US$250 million in Q1 2023, narrowing from US$435 million in Q1 2022.
This comes on the back of lower net interest expenses and improved group adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda).
The losses included a US$37 million loss from fair-value changes on investments, and US$103 million in non-cash stock-based compensation expenses.
Revenue rose 130 per cent in Q1 2023 to US$525 million from US$228 million in the year before. This was attributed to growth across all business segments, reduction in incentives and a change in business model for certain delivery offerings in one of its markets. Without the change in business model, Q1 2023’s revenue growth would have been 50 per cent year on year.
Adjusted Ebitda improved 77 per cent for Q1 2023, coming in at a loss of US$66 million, compared to a loss of US$287 million in Q1 2022.
Grab’s chief financial officer Peter Oey said: “On the back of the solid first-quarter performance, we are revising up our adjusted Ebitda guidance range by US$80 million to US$90 million, and to a loss of US$195 million to US$235 million for the full year 2023.”
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Revenue for the delivery segment jumped 203 per cent for Q1 2023 to US$275 million from US$91 million in Q1 2022. The growth was attributed to contributions from Jaya Grocer, a Malaysian supermarket chain that Grab acquired in January 2022, and to the change in business model for a market the company did not identify.
GrabUnlimited, Grab’s subscription programme, accounted for over a quarter of delivery gross merchandise value for the quarter. Subscribers spent 3.7 times more in food deliveries compared to non-subscribers.
The mobility segment reported a 72 per cent jump in Q1 2023 revenue to US$194 million from US$112 million. This was driven by efforts to improve supply across the region to ride the wave of the recovery in tourism and domestic demand.
The monthly active driver supply rose 10 per cent year on year and 2 per cent quarter on quarter in Q1 2023. The total active driver online hours went up 14 per cent year on year, and 3 per cent quarter on quarter. Average driver earnings per transit hour rose 14 per cent year on year, and 4 per cent quarter on quarter.
The financial-services segment reported a 233 per cent increase in Q1 2023 revenue to US$38 million from US$11 million in Q1 2022. This was mainly driven by lowered consumer incentives and higher contributions from lending.
Loan disbursements in Q1 2023 grew 45 per cent year on year, and the Grab-and Singtel-backed GXS Bank launched the digital bank’s first lending product in April.
Chief executive officer Anthony Tan said: “With five sequential quarters of adjusted Ebitda improvements, we remain on track on our path to profitability, and to achieve group adjusted Ebitda breakeven in the fourth quarter of this year.”
Grab is registering growth in its food-delivery segment with the close of the Ramadan fasting period, with the momentum carrying forward into May. The super-app expects the mobility segment to grow with the rebound in tourism and business demand.
“Going into the second half, we’ll aim to sustain the momentum. We will continue to reduce our cost to serve and leverage our scale to improve affordability,” said Tan.
The digital banks in Malaysia and Indonesia are on track for launch later this year. Grab is forecasting the breakeven point for all three digital banks, including in Singapore, by the end of 2026.
Chief operating officer Alex Hungate said: “Our vision is not to be the largest bank in our market. We are focused on supporting our own ecosystem, so the size will be proportionate to the gross merchandise value and monthly transacting user base that the ecosystem has.”
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