Grab forecasts weak 2024 revenue after profitable quarter, buyback plan

FILE PHOTO: A Grab logo is pictured at the Money 20/20 Asia Fintech Trade Show in Singapore March 21, 2019. Picture taken March 21, 2019. REUTERS/Anshuman Daga/File Photo

(Reuters) -Grab Holdings posted its first-ever quarterly profit on Thursday and announced a maiden share repurchase plan, but a weak annual sales forecast fanned growth worries and weighed on the ride-share and food-delivery firm's shares.

The Singapore-based company forecast fiscal 2024 revenue between $2.70 billion and $2.75 billion, the midpoint of which was below analysts' estimates of $2.80 billion, according to LSEG data.

Grab's U.S.-listed shares were down 5% at $3.28 in premarket trading.

The forecast took the sheen away from Grab's earnings, while the company also said it expects an annual adjusted core profit.

"There will be revenue acceleration in the years beyond 2024 as investments in our new products bear fruit," Grab CFO Peter Oey said.

Grab and rivals such as Indonesia's GoTo benefited from a boom in food-delivery services during the pandemic, but the growth is slowing. Grab's ride-share growth has only just hit pre-pandemic levels.

Grab trimmed its workforce, as well as cut back on some incentives and technology costs over the past two years.

The company said on Thursday it will repurchase $500 million worth of class A ordinary shares, and announced an early payment of the remainder of a term loan. Uber unveiled its first-ever share buyback last week.

Grab forecast full-year adjusted core profit of $180 million to $200 million, compared to estimates of $135.2 million.

The company reported fourth-quarter revenue of $653 million, beating estimates of $629 million. Mobility revenue rose 26%, helped by holiday-quarter travel demand, while delivery revenue increased 20%.

Grab posted a net income of $11 million in the fourth quarter, helped in part by a "reversal of an accounting accrual," according to the company.

(Reporting by Yuvraj Malik in Bengaluru; Editing by Shounak Dasgupta)

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