According to a report from Reuters, Delivery Hero, a German online takeaway food company (DHER.DE), has announced an upward revision of its full-year revenue forecast. Additionally, the company has expressed its intention to pursue growth investments following its transition to profitability in the first half of the year. This positive financial performance can be attributed to the increasing demand for its services.
The company based in Berlin anticipates a year-over-year increase in total segment revenue of approximately 15% for the current year. This projection is an improvement from the previous guidance, which estimated a growth rate of around 10% in Constant Currency terms.
The company has reaffirmed its forecast for a gross merchandise value (GMV) adjusted core profit (EBITDA) margin of more than 0.5% for the fiscal year.
Following a period of heightened growth driven by the pandemic, Delivery Hero has shifted its focus towards achieving long-awaited profitability. This objective is pursued while simultaneously sustaining growth, as investor confidence in the rapidly expanding yet predominantly unprofitable sector has begun to diminish.
During a conference call, Chief Financial Officer Emmanuel Thomassin expressed that in the event the company is projected to surpass the implied EBITDA guidance, it would prioritise reinvesting in its core business.
According to CEO Niklas Oestberg, the region with the most potential for investment is Asia, with a specific focus on South Korea.
The individual stated, “There will not be a competition centered around vouchers,” as the company presently prioritises investments that have a lasting impact on sustainability rather than yielding immediate results.
According to his statement, the Asian market as a whole demonstrated positive performance, with the exception of Vietnam. The company anticipates no foreseeable recovery of profitability in Vietnam, even in the long term.
In the context of Thailand, a market that is not currently generating profits, the business is experiencing a resurgence in growth. However, as the individual stated, it’s possible that achieving profitability will take longer.
The stock of Delivery Hero experienced a 7.2% increase at 14:06 GMT, surpassing the performance of the German midcap index (.MDAXI).
The group reported a positive adjusted EBITDA for the first half of the year, a significant improvement from a loss of 323.0 million euros ($354.59 million) in the same period last year. Based on a consensus the company had compiled, analysts had predicted a loss of 5 million euros. The specific numerical value was not revealed.
In the second quarter, revenue increased by 16% in constant currency, reaching a total of 2.58 billion euros. This figure slightly exceeded the consensus estimate of 2.50 billion euros.
In the quarter, the total Gross Merchandise Value (GMV) experienced a growth of 8% in constant currency, reaching 11.08 billion euros. Analysts had predicted a value of 10.96 billion euros, but this exceeded that estimate. The Asia segment of the group, which encompasses its primary market, South Korea, experienced a 2% growth in Gross Merchandise Value (GMV) when adjusted for constant currency.
