September 26, 2017 / 6:06 AM / a year ago

Germany's Delivery Hero serves up revenue leap, slimmer losses

FRANKFURT (Reuters) - Germany’s Delivery Hero (DHER.DE), the world’s largest online takeaway food delivery company, reported a 66 percent jump in first-half revenue and sharply narrower losses, after slightly slowing its expansion with a focus on breaking even in 2018.

FILE PHOTO - The Delivery Hero headquarters is pictured in Berlin, Germany, June 2, 2017. REUTERS/Fabrizio Bensch

First-half revenue reached 246.5 million euros (217.03 million pounds), while the adjusted margin on core earnings narrowed to a loss of 18 percent from a loss of 47 percent a year earlier.

“We achieved a good balance between strong growth and moving closer towards profitability,” Chief Executive Niklas Oestberg said in a statement.

Delivery Hero said it expected revenue of 530-540 million for the full year, slightly above analysts’ consensus forecast of around 531 million euros and in the face of headwinds from converting results from other regions into a stronger euros.

The full-year adjusted margin on earnings before interest, tax, depreciation and amortization is expected to improve to minus 15-17 percent. It reiterated its plans to break even and then turn profitable by at least December 2018.

“We are committed to full year profitability in ‘19,” Oestberg told journalists on a conference call.

The first-half revenue growth suggested a slowdown in the second quarter from 90 percent growth in the first quarter, based on previously published figures. However, on a like-for-like basis the company said second-quarter revenue growth accelerated to 49 percent from 46 percent in the first quarter.

The company operates in more than 40 countries in Europe, the Middle East, North Africa, Latin America and Asia. It saw double-digit first-half revenue growth in all of its regions.

Oestberg said based on results reported by rivals, Delivery Hero had increased share in all its markets. In the first half, it faced heavy marketing spending in its home market Germany by Dutch rival’s (TKWY.AS) unit.

“In markets where we do compete with someone, we have been taking market (share), regardless of whether we make money or not,” he said. “I am also very happy with Germany ... we had a good growth in Q2 (second quarter).

Delivery Hero was the fourth online food delivery firm to go public in recent years, following U.S.-based GrubHub (GRUB.N), Britain’s Just Eat (JE.L) and, all of which have seen their share prices soar.

Its shares are up nearly 30 percent since its initial public offering in late June. The stock closed up 3.85 percent at 33.75 euros in Frankfurt trading on Tuesday.

A fifth online food delivery firm, privately held UK-based Deliveroo, recently raised $385 million in new funding at a $2 billion valuation.

Reporting by Eric Auchard; Editing by Mark Potter, Greg Mahlich

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