Delivery Hero eyes smaller loss as it shifts focus to profitability

Delivery Hero eyes smaller loss as it shifts focus to profitability

German online takeaway food company Delivery Hero (DHER.DE) on Friday forecast a smaller loss for the year as it shifts its focus more firmly to profitability in the improving competitive environment.

The shares, which have lost more than a half of their value since the start of the year as investors moved away from pandemic-era darlings, were up 12.9% at 0956 GMT.

The Berlin-based group now sees smaller negative margin on adjusted core loss (EBITDA) in 2022, at -0.9% to -1% of gross merchandise value (GMV), against a previous guidance of -1% to -1.2%.

“The scale of improvement in the loss is better,” Berenberg analyst Sarah Simon said, adding the investor sentiment is much more geared towards profitability now.

Delivery Hero cut its full-year revenue forecast to between 9.0 billion and 9.5 billion euros ($9.14 billion-$9.65 billion) from a previous range of 9.5 billion to 10.5 billion.

Including Spanish delivery startup Glovo where it holds a majority stake, the group sees revenue of 9.8 billion to 10.4 billion euros for the year, with an adjusted EBITDA/GMV margin of -1.5% to -1.6%.

It expects its platform business – including loss-making Glovo – to break even on adjusted EBITDA level in the third quarter, and to generate between 40 million and 120 million euros in the fourth.

It had previously forecast fourth-quarter EBITDA of between 0 to 100 million euros for the platforms segment.

Delivery Hero also released preliminary figures for the second quarter, including a 38% boost in quarterly revenues to 2.1 billion euros driven by strong performance in its core food delivery business.

($1 = 0.9845 euros)