BERLIN (dpa-AFX) - The food delivery service Delivery Hero made less of a loss in the first half of the year than a year earlier. However, the company with brands such as Foodpanda and Tabalat missed average expectations on the capital market. In Wednesday morning trading, the stock slid seven percent, putting it at the bottom of the MDax. This corresponds to the lowest value since April. Since the turn of the year, the bills have already lost around a quarter of their value.
As the MDax group announced in Berlin on Wednesday, a net loss of a good 832 million euros was accumulated between January and the end of June - compared with just under 1.5 billion euros in the same period last year. However, analysts on average had hoped for a smaller loss of just under 570 million euros.
Industry experts also blamed other key figures. Analyst Wassachon Udomsilpa of Canadian bank RBC noted in an initial reaction that gross margin as measured by gross merchandise value (GMV) was lower than she and her colleagues had suspected. "While marketing and IT expenses were above consensus, general and administrative expenses were not as high as thought," she wrote. The level of advertising spending is considered a key indicator in the industry of whether customers will have groceries delivered to their homes or order from restaurants even without the use of coupons.
Delivery Hero struggled in the first half of the year, especially in its largest segment of Asia, as people started eating out again after the Corona pandemic, causing the total amount of goods ordered to decline. In addition, competition is intensifying in South Korea, where online mail-order company Coupang is looking to rival Delivery Hero subsidiary Woowa. Woowa operates the Baedal Minjok food delivery platform in South Korea.
However, new revenue streams are having a positive impact on the bottom line. Delivery customers now face additional fees from Delivery Hero, as well as its competitors Just Eat Takeaway, Uber Eats and Doordash subsidiary Wolt.
In addition to increased minimum order values, the services have recently started charging "service fees" on top of the delivery costs that are usually incurred anyway. Uber Eats in particular is cashing in on the latter: anyone who wants their food delivered prioritized pays extra on top of the delivery fee. Alternatively, customers can opt for paid subscriptions that include a certain number of free deliveries.
Restaurants, on the other hand, can consider whether they want to be displayed as "premium placements" on delivery platforms and apps in exchange for money. With these measures, Delivery Hero then aims to reach the operating break-even point for the first time in the company's history by the end of the year. The team led by Group CEO Niklas Östberg and CFO Emmanuel Thomassin is targeting an operating profit margin (Ebitda margin) measured against gross merchandise value of at least 0.5 percent. Sales and operating profit (Ebitda) are expected to pick up significantly in the second half of the year.
Meanwhile, so-called segment revenue is expected to increase slightly more than previously thought. This is how Delivery Hero defines its revenue, which is adjusted for marketing expenses such as vouchers and discounts, among other things. Gross merchandise value (GMV) is expected to increase further by five to seven percent.
Finance chief Emmanuel Thomassin would not change the profitability target at the beginning of August. "We will not raise our operating profit outlook. We want to keep open the possibility to reinvest," he said in an interview with financial news agency dpa-AFX. "What we promised as an operating result, we are sticking to that and we will deliver that." He added that the Group was "more than well on track." Thomassin would not commit to exactly where he would invest./ngu/jcf/mis