Indonesia's GoTo sees breakeven in 2024 after first quarterly profit

JAKARTA (Reuters) -Indonesia's biggest tech firm GoTo Gojek Tokopedia expects to break even in terms of adjusted core earnings this year after booking its first quarterly profit on that basis in the final three months of 2023, it said on Tuesday.

GoTo, which offers ride-hailing, e-commerce, and financial services, reported adjusted earnings before interest, tax, depreciation, amortisation (EBITDA) and rent of 77 billion rupiah ($4.9 million) in the last quarter of 2023.

Its adjusted EBITDA loss for the whole of 2023 also narrowed 77% to 3.7 trillion rupiah.

"GoTo has established a solid operational base, achieving adjusted EBITDA profitability in Q4 ... Looking ahead, our focus is on strengthening this base to foster accelerated, profitable growth.” CEO Patrick Walujo said in a statement.

The swing to profit was supported by GoTo's efforts to reduce costs, including lower incentives and marketing spending, which fell 33% in the quarter from the same period of 2022.

GoTo, backed by Japan's SoftBank Group and Singapore's sovereign wealth fund GIC, has implemented various cost-cutting measures including layoffs, which impacted 600 roles last year.

The company said its profitability going forward would also be supported by its partnership with China's TikTok, which bought a majority stake in GoTo's e-commerce unit Tokopedia in December.

"E-commerce ... is set to become a cash-accretive segment for the company through our agreement with TikTok," GoTo finance chief Jacky Lo said, referring to the short-video app.

The deal with TikTok contributed to a wider full-year net loss for GoTo in 2023 of 90.5 trillion rupiah, from 40.4 trillion rupiah in 2022, due to a reversal of goodwill, which amounted to 78.8 trillion rupiah.

However, GoTo said the loss was non-recurring and non-cash in nature, and had no impact on adjusted EBITDA or cash flow.

($1 = 15,710.0000 rupiah)

(Reporting by Stefanno SulaimanEditing by Mark Potter)