by Ed Frankley
Shares of Delivery Hero SE jumped on Tuesday when it said late Monday that it expects its core food-delivery business to break even in the second half of 2022.
At 0845 GMT, shares were up 4.9% at 85.96 euros.
The German food-delivery platform now expects adjusted earnings before interest, taxes, depreciation and amortization to be between 0 and 100 million euros ($0-$113.3 million) in the fourth quarter of 2022.
It also said investments related to its accelerated-commerce business should peak in the first quarter and gradually decrease afterward, and its long-term adjusted EBITDA-to-gross-merchandise-value margin targets of 5% and 8%. confirmed between
“The investment strategy has proven to be successful, and we are on a solid trajectory to make our food delivery business profitable during the second half of this year,” said Emmanuel Thomasin, Chief Financial Officer, Delivery Hero.
The latest guidance is well above consensus expectations of negative EBITDA of EUR125 million of adjusted second-half in 2022, although more detail is needed, particularly on the integration of subsidiary Glovo, analysts at Citi say.
Delivery Hero became the majority shareholder in Glovo, Spain on the last day of 2021, increasing its stake to over 83%.
Still, the company’s latest update is striking because Delivery Hero hasn’t given targets for break-even attainment time since 2018, said Brian Garnier.
“The objective seems clear: to reassure shareholders after a complicated year in 2021 — the share price down nearly 30% — and a rough start to the year — down 17% in the year — and ultimately reduce risk.” A hostile takeover,” said Brian Garnier.
Write to Ed Frankl at [email protected]