Grab’s FY2022 losses drop 51% to US$1.7b, brings forward adjusted Ebitda breakeven guidance

GRAB reported a 51 per cent year-on-year (y-o-y) drop in losses for FY2022 to US$1.7 billion from US$3.5 billion, as revenue for the period surged 125 per cent to US$1.4 billion from US$675 million in 2021.

Excluding a US$68 million uplift in revenue from a business model change in one of the superapp’s markets from being an agent arranging for delivery service to becoming a principal delivery provider, FY2022 revenues still exceeded the guidance of US$1.3 billion.

The fall in losses was driven by total segment-adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) turning positive from a loss of US$125 million in FY2021 to a positive US$65 million in FY 2022. Adjusted Ebitda fell 6 per cent from US$842 million to US$793 million.

The deliveries segment saw revenue grow 349 per cent from US$148 million in FY2021 to US$663 million in FY2022. Segment-adjusted Ebitda increased 73 per cent from negative US$130 million to negative US$35 million. The delivery segment saw segment-adjusted Ebitda turn positive in the fourth quarter of 2022 to US$47 million from negative US$84 million a year prior.

The growth was primarily driven by contributions from Jaya Grocer and reduction in incentives as a percentage of gross merchandise value (GMV) to 12 per cent from 18 per cent.

Grab also closed its dark stores and Grab Kitchen operations in most countries, which helped reap costs savings and improved delivery profitability.

BT in your inbox

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign Up

Sign Up

The mobility segment saw a rebound, with GMV now 74 per cent of pre-Covid levels, with revenue up 40 per cent from US$456 million in FY2021 to US$639 million in FY2022. Segment-adjusted Ebitda grew 43 per cent from US$345 million in FY2021 to US$494 million in FY2022.

Grab saw a strong rebound in airport rides in Q4 2022, jumping 244 per cent year on year (yoy), with plenty of headroom for growth, according to Alex Hungate, chief operating officer, Grab. “We are positioning Grab to benefit from the broader South-east Asia reopening, especially from the rebound in tourism sector,” he said.

There is also a focus on bringing on new drivers to the platform. The onboarding process has been made more seamless and resulted in a 71 per cent y-o-y increase in the number of new drivers in Q4 2022 compared to Q4 2021. The Philippines’ government has announced that it will open up 100,000 more two-wheel and four-wheel licences for interested transportation network companies in the country.

SEE ALSO

Upskilling for gig workers poses different problems needing different solutions

Tin Pei Ling joins Grab Singapore as director of public affairs and policy

Tin Pei Ling moves to less-visible Grab role amid public disquiet

GXS Bank, the joint venture digital bank with Singtel, is also showing promising signs, nearing the S$50 million deposit cap for the initial phase of its Singapore licence. GXS is expanding into lending with a credit product that has been already soft-launched to Grab and Singtel employees in January. The digital banks in Indonesia and Malaysia are being prepared for launch later this year.

Grab is being disciplined with capital, with costs such as cloud hosting expected to reduce by 5 per cent to 10 per cent yoy for 2023. Zero-based budgeting, where all expenses must be justified, has been implemented on a number of operating expense line items including travel and professional fees. It has also frozen hiring across most regional functions. 

The superapp company is also bringing forward its group adjusted Ebitda breakeven guidance from H2 2024 to Q4 2023. Grab is giving FY2023 revenue guidance between US$2.2 billion and US$2.3 billion and adjusted Ebitda of US$275 million to US$325 million.

Anthony Tan, chief executive officer and co-founder of Grab, said: “We achieved these results by focusing on capturing the rebound in mobility demand, optimising our costs, reducing our cost-to-serve and innovating on products and services that drive stickiness and engagement within our ecosystem. As we look ahead, we will remain laser-focused on driving sustainable growth, and improving the efficiency of our ecosystem.”