(Aug 4): Grab Holdings Ltd raised its annual earnings and sales forecasts, a sign that robust demand from Southeast Asian commuters is helping to absorb impact of higher fuel prices stemming from the Middle East conflict.
The ride-hailing and delivery company predicted US$720 million to US$740 million in adjusted earnings before interest, taxes, depreciation and amortization for this year, while sales will be as much as US$4.15 billion. In May, the company had forecast earnings on that basis of as much as US$720 million and up to US$4.1 billion in sales.
Higher fuel price has pushed up ride and delivery fares in Southeast Asia, weighing on demand at Singapore-based Grab and its peers. The platform companies can cushion the impact by offering incentives to riders and consumers, though that risks putting pressure on their already thin profit margins.
At the same time, competition in the cut-throat market isn’t easing. Rivals such as GoTo Group and new entrants like Green & Smart Mobility JSC are vying against Grab in populous markets like Indonesia and Vietnam. Uber Technologies Inc., one of Grab’s backers, could also be a looming threat — its planned acquisition of Delivery Hero SE opens up a path for Uber Eats to re-enter Southeast Asia.
Grab, meanwhile, is attempting to strengthen its market position by integrating meal-delivery firm Foodpanda’s Taiwan operations, acquired from Delivery Hero earlier this year.
Grab has also been releasing new products — including AI-powered concierge tools and ways to split ride fares with friends — in hopes of attracting new users in a sluggish economy, while curtailing a once-frenetic pace of expansion. It’s also continuing to push into fintech services to leverage its user base.
Shares of the company have lost about 26% this year, and are down more than 50% since the company’s stock-market debut in New York in late 2021. The company said its board authorized an additional US$750 million in share repurchases.
Net income jumped to US$252 million for the three-month period ended in June from US$35 million a year earlier, the company said. Net revenue advanced 22% to US$997 million.
Indonesia reducing the maximum scooter-ride commission that platform companies can charge to 8% from roughly 20% is another challenge for Grab. The company has said it plans to adjust its Indonesian business after Jakarta’s surprise edict, though Indonesia two-wheeler riders only account for less than 6% of the business volume for its mobility operations.
What Bloomberg Intelligence says
Grab’s US$600 million deal to purchase Foodpanda’s Taiwan business remains uncertain with Taiwan’s Fair Trade Commission pushing back its decision deadline to October 2026. Notably, Uber’s takeover of Delivery Hero excluded Foodpanda’s Taiwan business, which Uber failed to take over in 2024. As such, either Grab’s entry or a standalone Foodpanda Taiwan could maintain the effective duopoly. Superbank’s consolidation in May will lift financial services revenue but two months of contributions is unlikely to offset the segment’s loss.
-Jason Low, analyst
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