Grab revealed its mobility GMV is back at 85% of what it was prior to Covid. Peter Oey, the CFO, reported on the organization's Q2 earnings call that the firm is on track to reach its pre-Covid GMV levels by the end of 2023. Grab has advanced its breakeven aim to Q3 and anticipates its 2023 revenue to be within the range of $2.2 billion and $2.3 billion.
Grab reported in its second-quarter earnings release that its mobility gross merchandise value (GMV) for the quarter was $1.32 billion, up 28% from $1.03 billion in the same period a year ago. According to the Singapore-based ride-hailing company, its mobility GMV has recovered to 85% of pre-Covid levels. COO Alex Hungate stated on the earnings call, "International traveler demand continues to recover. We increased airport rides by 64% year on year to reach 77% of pre-Covid levels. Domestic demand also further normalized across our markets with mobility GMV now 85% of pre-Covid levels. Several of our core markets such as Malaysia, Singapore and Thailand have either reached or surpassed pre-Covid levels when comparing mobility GMV between second quarter 2023 and the same period in 2019." Lockdowns and restrictions due to the pandemic had a negative impact on Grab's ride-hailing business, with the third quarter of 2021 recording $88 million in revenue for a 26% year-over-year decrease, whereas its deliveries unit saw revenue soar 58%. Singapore lifted pandemic-era border measures in February this year, and with the recovery of domestic and international traveler demand, Grab is expecting to hit pre-Covid levels by the end of the year.
In February, Grab CFO Peter Oey told CNBC that as people have headed back to offices and begun traveling again, the company has witnessed a considerable uptick in traffic. He also reported during Grab's earnings call on Wednesday that they remain on target to reach pre-Covid GMV levels by 2023. Furthermore, GrabShare, its car-pooling service which had to be suspended during the pandemic, was brought back at the beginning of 2023. As Sachin Mittal, head of telecom, media and technology research at DBS Bank, commented in a note, the GMV growth is dependent on the development of Mobility and deliveries GMV, as well as the rise in monthly transacting users.
Deliveries GMV saw an increase of 4% year on year, largely attributed to the success of GrabUnlimited, a monthly subscription which gives patrons discounts and deals.DBS remarked that Grab is fully valued and that "there is not much potential for margin growth in the long run."Grab's Hungate further revealed that driver numbers are now 84% of their pre-Covid-19 amount and that they are "attempting to improve driver supply." Singapore has faced a driver shortage since the pandemic, resulting in fares becoming more expensive and waiting times increasing.In July, Grab announced that they would purchase Trans-cab in order to grow its driver selection and digitise Trans-cab's fleet operations. Trans-cab is Singapore's third largest taxi operator and has a fleet combining to more than 2,500 vehicles. It is estimated that the deal will be complete by the end of the fourth quarter.Kai Wang, a senior equity analyst from Morningstar Asia, declared in a Aug. 24 report that "the acquisition of Trans-cab displays Grab's competitive advantages this quarter. We assume that the acquisition will provide access to car leasing and extend the fleet for Grab, which should expand its mobility services in Singapore."
On Wednesday, Grab reported figures that surpassed expectations. Revenue for the second quarter arrived at $567 million, a 77% year-on-year increase. Meanwhile, its net loss was $135 million, representing a 75.3% drop from the second quarter of 2022's figure of $547 million. The company's U.S.-listed stocks closed the day with a 10.78% growth. Jonathan Woo, Senior Research Analyst of Phillip Securities Research commented that, "Overall, it is quite a positive set of numbers." He added, "At least there is some hope of profitability. We think that Grab could reach a net profit by the start of 2025 should costs continue to decline."
Grab has logged billions of dollars in losses since its inception, but has now shifted its breakeven target to the third quarter. Previously, the target was set for the fourth quarter. Grab aims to hit revenue between $2.2 and $2.3 billion by 2023. The tech giant has been cutting costs due to economic headwinds, including reducing customer incentives, discretionary spending and going through the process of mass layoffs. Sea and GoTo have taken similar actions, such as mass layoffs and salary freezes, in order to remain agile. In June, Grab announced it would cut over 1,000 jobs to counter the higher cost of capital. It was the most significant job cuts since 2020, when the company terminated 360 employees because of the pandemic.
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