Grab's free cash flow positivity to follow in the coming FY2024
Tiruchelvam believes that Grab could acquire GoTo with the support of a white knight, as certain industry trends aren't in GoTo's favour.
According to Momentum Works, Grab’s share of Asean food delivery was 54%, outclassing competitors including GoTo, which had a corresponding share of 13%.
While Grab has grown its share consistently over the past three years, GoTo’s share has been stagnant, raising chances of it running out of cash by end of FY2023, says Tiruchelvam.
“This development could not only rescue GoTo but also enhance Grab’s value proposition by underlining its dominance and cutting operating expenses.
“We raise the probability to Grab acquiring GoTo with US$3.5 billion of equity financing in FY23 from 55% to 65% with the recent industry report,” adds Tiruchelvam.
On its part, Grab is “closing in on a turning point in its EBITDA performance at a segmental level,” says Tiruchelvam.
For its 3QFY2022 ended Sept 30 2022, Grab’s delivery segments recorded adjusted EBITDA positivity (5% of revenue) for the first time, while its mobility segment generated a record adjusted EBITDA margin of 12.5% in the same quarter.
Tiruchelvam expects the current FY2023 to be the first full year of EBITDA positivity for the delivery segment, and free cash flow positivity to follow in the coming FY2024.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
102711703 : No more acquisition please
tohlong tohlong
b34r 102711703: This is more like removing the competition and buying market share for Grab, so it makes sense.
102711703 : Grab target
to be in profitability by end of 2023 or Q1 of 2024. If go for the acquisition, Grab will loose focus again and need to spend much money to settle their issues thus continue to lose money. Previously cases already shown much issue.