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Delivery Hero eyes smaller loss as it shifts focus to profitability

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FILE PHOTO: The Delivery Hero's logo is pictured at its headquarters in Berlin
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(Reuters) - German online takeaway food company Delivery Hero 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)

(Reporting by Linda Pasquini in Gdansk; editing by Milla Nissi)

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