GRAB has hit its adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) breakeven forecast, posting US$29 million for the third quarter of 2023.

The transport and food-delivery operator had, at last quarter’s earnings call, given guidance for adjusted Ebitda breakeven by Q3 2023. The positive adjusted Ebitda results also beat analysts’ consensus of US$9.5 million.

Grab’s losses for the quarter narrowed to US$99 million, from US$342 million a year prior. This was driven by a reduction in net interest expenses, fair-value losses on investments and share-based compensation expenses. The Q3 losses included a US$70 million non-cash share-based compensation expense.

Revenue rose to US$615 million, a 61 per cent increase from US$382 million in the same period a year ago. The company attributed this to growth across all business segments and optimisation of incentives.

The positive Ebitda, meanwhile, was attributed to increased gross merchandise value (GMV) and revenue, lowered regional corporate costs, and improved adjusted Ebitda across all business segments.

Loss per share stood at US$0.02 for the quarter, down from US$0.08 the previous year.

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Grab’s number of monthly transacting users (MTU) grew 7 per cent to 36 million in Q3, from 33.5 million a year earlier. But its GMV per MTU fell 2 per cent year on year, to US$148 from US$151.

The company revised its revenue guidance for FY2023 upwards to a range of US$2.31 billion to US$2.33 billion – it previously indicated a range of US$2.2 billion to US$2.3 billion.

Adjusted Ebitda for FY2023 was also revised upwards, to between minus US$20 million and minus US$25 million, from between minus US$30 million and minus US$40 million previously.

Future focus

Peter Oey, chief financial officer of Grab, said: “As we look beyond 2023, we will continue to sharpen our focus on generating adjusted Ebitda and free cash flows, while maintaining cost discipline to drive further operating leverage.”

On the potential acquisition of food-delivery rival foodpanda, Grab has remained mum.

“We won’t comment on rumours, but I will say we don’t operate for mergers and acquisitions (M&As),” said Alex Hungate, chief operating officer at Grab.

There are three guiding principles for the company’s future investment focus, said chief executive Anthony Tan. First, it has to improve the health of its marketplace and solve an actual problem. Second, it has to have confidence in executing and scaling the investment. Third, it has to generate sustainable unit economics in the long term.

“We have a strong and robust balance sheet today, and while this provides us with financial flexibility, we must maintain discipline and a high hurdle rate when deploying all capital across both organic and inorganic opportunities,” Tan added.

Citing Grab’s acquisition of Jaya Grocer as a positive example, Oey said the move has benefited Grab’s Malaysia business. A financially accretive acquisition is critical, he added, but Grab will look at the dynamics of a deal in evaluating potential M&As.

“We’re making sure we have a healthy cash balance and taking a balanced approach to capital allocation,” he said.

On a separate question about competition concerns over its acquisition of Singapore taxi operator Trans-cab, Grab said it is working closely with the Competition and Consumer Commission of Singapore.

Said Hungate: “We are committed to making sure that drivers can openly drive on any platform that they want to drive on. There will be no lock-ins to the Grab platform.”

Shares of Grab were up 6.3 per cent or US$0.20 to US$3.39 in pre-market trading as at 9.18 pm on Thursday.