By Nivedita Balu
(Reuters) – Grab Holdings Ltd on Thursday reported a plunge in revenue that missed estimates as massive promotional offers and higher driver incentives hurt the largest ride-hailing and food delivery firm in Southeast Asia.
Shares of Grab, which reported its first quarterly earnings since going public in December, fell 10% to $4.71 in pre-market trading in New York.
They have more than halved in value since their debut.
Singapore-based Grab said it invested aggressively in improving incentives for drivers to boost supply as ride-share demand recovered from pandemic lows.
That led to a 27% decline in the unit’s fourth-quarter revenue.
Chief Financial Officer Peter Oey said in an interview that driver demand has shot up and the company was still catching up in terms of supply.
Founded in 2012 as a regional taxi app in Malaysia, SoftBank Group-backed Grab operates a “super app”, which provides ride-hailing, food and grocery delivery, mobile banking and payments in Southeast Asia.
The delivery unit, which focuses on food delivery services in countries including Singapore and Malaysia, recorded a 98% drop in revenue as it poured money into incentives to retain its market leader position, and increased dining out hurt.
“All those elements (investments) will pay off in the long term,” Oey said, adding that its two biggest units – mobility and delivery – were strong going into the first quarter.
Grab, which combined with blank check firm Altimeter Growth Corp in a $40 billion merger last year and went public in December, is facing rising competition from other “super apps” such as Gojek in Indonesia.
Grab’s revenue fell 44% to $122 million for the three months ended Dec.
31, below the average analyst estimate of $167 million, according to Refinitiv data.
Loss was $1.1 billion, which included expenses related to Grab’s listing, versus a loss of $635 million a year earlier.
(Reporting by Nivedita Balu in Bengaluru; Editing by Shinjini Ganguli)
