By Linda Pasquini
(Reuters) -Delivery Hero’s revenue for the second quarter came in slightly above expectations on Thursday, with the German online takeaway food company citing a stronger performance across several markets.
But the performance was overshadowed by the company lowering its guidance for full year adjusted earnings late on Wednesday to reflect a hit from a stronger euro against U.S. Dollar-pegged currencies and the Korean Won. It said it would otherwise have been on track to meet its previously stated annual target.
After experiencing a surge in orders during the COVID-19 pandemic, food delivery companies have struggled to turn revenue growth into profitability as investors’ focus shifts to returns.
Delivery Hero’s like-for-like revenue grew 27% at constant currency and excluding high inflation to 3.7 billion euros ($4.3 billion) in the second quarter, the company said. That was above analysts’ estimates of 3.5 billion euros in a company-provided poll.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) grew 71% to 411 million euros in the first half, also above analysts’ estimate of 384 million euros.
Analysts at JP Morgan said the lower guidance would likely have a negative impact on the company’s shares despite the solid results.
Shares in Delivery Hero rose more than 4% in morning trading before reversing course to trade down 3% at 0948 GMT.
The company saw “clear improvements” in South Korea, helped by the introduction of subscriptions programs and investments in its own delivery network, Chief Financial Officer Marie-Anne Popp said in an interview.
South Korea is a key market for Delivery Hero, after it bought the country’s largest online food delivery platform Woowa in 2021, and Asia overall accounts for over one third of the company’s global sales.
When asked about top shareholder Prosus’ plans to sell shares in the company to address EU concerns about its planned acquisition of Just Eat Takeaway , Popp said the company’s focus was on operating its business well.
“If it means at some point we have to welcome new shareholders, then we will do that,” she said, without giving further details.
($1 = 0.8542 euros)
(Reporting by Linda Pasquini in Gdansk, editing by Matt Scuffham)
