SINGAPORE: Grab raised its annual profit forecast upward following a strong quarterly revenue performance that surpassed expectations, on Wednesday (15 May).
CNA reported that the company, known for its ride-share services, experienced significant growth driven by recent cost-saving initiatives and increased demand for its offerings.
In 2023, Grab went through a restructuring exercise, including 1000 workforce reductions and technology expense cuts, aimed at achieving positive free cash flow this year.
According to Mr Peter Oey, Grab’s Chief Financial Officer, a surge in Southeast Asian tourism and a rise in corporate events and concerts in the last quarter contributed to heightened demand for ride-share services.
Grab’s US-listed shares rose by 2% in after-hours trading following the announcement of its strong quarterly results.
For the first quarter ending March 31, Grab reported a revenue of US$653 million (approx. S$877.99 million), a 24% increase from the same period last year. This exceeded analysts’ expectations of US$642.4 million (approx. S$863.74 million).
The company also reported an adjusted core profit of US$62 million (approx. S$83.36 million), a significant improvement from the previous year’s loss of US$67 million (approx. S$90.09 million).
Both of Grab’s primary revenue streams, food delivery and ride-share businesses, saw strong growth rates of 19% and 27%, respectively, outperforming Visible Alpha’s consensus estimates.
Grab’s impressive performance reflects the growing consumer spending trends in Southeast Asia. As consumers continue to increase their discretionary spending, Grab stands to benefit.
In light of its strong financial performance, Grab has raised its full-year profit forecast. The company now anticipates an adjusted core profit between US$250 million (approx. S$336.14 million) and US$270 million (approx. S$363.03 million) for the year, up from its previous projection of US$180 million (approx. S$242.02 million) to US$200 million (approx. S$268.91 million).
Grab has maintained its revenue projection at US$2.70 billion (approx. S$3.63 billion) to US$2.75 billion (approx. S$3.70 billion).
Additionally, Grab disclosed a US$97 million (approx. S$130.42 million) Class A shares repurchase as part of its US$500 million (approx. S$672.28 million) buyback plan announced February this year. /TISG
Read also: Grab introduces fairer payment system for drivers
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