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Grab's growing investments hurt quarterly revenue

Grab's growing investments hurt quarterly revenue

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

Grab Holdings, the largest ride-hailing and food delivery firm in Southeast Asia, on Thursday (Mar 3) reported a fall in revenue for the fourth quarter as it spent more on driver commissions and promotional offers.

Singapore-based Grab, in its first quarterly earnings report as a public company, said it invested in improving commissions for drivers to keep a steady supply amid the pandemic.

Founded in 2012 as a regional taxi app in Malaysia, SoftBank Group-backed Grab operates a "super app", which provides ride-hailing, food and grocery delivery, mobile banking and payments in Southeast Asia.

The delivery unit, which operates the GrabFood app a leading food delivery service in Southeast Asian countries including Singapore and Malaysia, recorded a 98per cent decline in revenue in the fourth quarter, hurt by people using coupons for payments.

Mobility revenue was down 27 per cent.

Chief financial officer Peter Oey said in an interview that the driver demand shot up and the company was still catching up in terms of supply.

"All those elements (investments) will pay off in the long term," Oey said, adding that its two biggest units - mobility and delivery - were strong going into the first quarter.

Grab, which combined with blank check firm Altimeter Growth Corp in a US$40 billion merger last year and went public in December, is also seeing rising competition from other "super apps" that provide a host of services under one app such as Gojek in Indonesia.

Grab's gross merchandise volume rose 26 per cent to US$4.5 billion in the quarter, powered by a 52 per cent rise in deliveries and 29per cent in its financial services segment, even as the mobility segment saw a 11 per cent drop.

Revenue was US$122 million for the three months ended Dec 31, compared with US$219 million a year ago.

Loss for the period was US$1.1 billion, which included expenses related to its IPO, compared with a loss of US$635 million a year earlier.

Source: Reuters/fh

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