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Takeaway sees stronger profitability in 2023 despite Q4 orders slump

FILE PHOTO: A Just Eat delivery bicycle in Paris, France, October 22, 2022

AMSTERDAM (Reuters) -Just Eat Takeaway.com NV, Europe's largest meals delivery company, said on Wednesday that its orders fell in the fourth quarter of last year, but shares leapt on a 2023 profit forecast.

The company, which has been cutting costs in a bid to improve profitability, said in a trading update that it had swung into a narrow profit in 2022 against expectations for a substantial loss, and saw earnings surging further next year.

Shares had jumped 12% to 26.92 euros by 0712 GMT in Amsterdam.

The company said it had earnings before interest, taxes, depreciation and amortization (EBITDA) of around 16 million euros ($17.3 million) for the full year 2022, swinging from a loss of 350 million euros in 2021. It also forecast EBITDA of 225 million euros for 2023.

Analysts polled by Refinitiv had seen full-year EBITDA at a loss of 340 million euros.

Citi analysts said in a note the EBITDA forecast was "materially above expectations". "We expect the shares to react positively ... despite somewhat weaker top-line trends than consensus," they said.

The rise in profits was driven by improved revenue per order and delivery costs per order, as well as cost-cutting measures, Takeaway said in a statement.

Chief Executive Jitse Groen said worries about the impact Europe's cost of living squeeze would have on consumers had been overblown.

"If you look at countries like Holland and Germany, they're pretty rich," he said, saying that customers are still ordering once or twice a month.

"Obviously everybody's annoyed that electricity bills are going up, but it's not that they all of a sudden have no money."

Fourth-quarter orders fell 12% to 239.8 million, compared with expectations of an 8% fall among analysts polled by Refinitiv.

The company reiterated its stance of exploring a "partial or full" sale of Grubhub, which it acquired for $7.3 billion in 2021, but Groen said the process is "difficult" in the current market.

Takeaway is due to report its fourth-quarter and full-year earnings on March 1.

($1 = 0.9272 euros)

(Reporting by Toby Sterling; Editing by Sherry Jacob-Phillips and Jan Harvey)