Germany’s Delivery Hero on track to break even after strong Q1

(Reuters) – German online takeaway food company Delivery Hero said on Thursday it was on track to generate a positive adjusted core profit for its food delivery business as early as this year following a spike in first-quarter sales.

The Berlin-based group added that it was on a “clear path” towards a break-even for the full group in 2023 and would now focus on order volume and operational efficiency in a bid to improve its gross profit margin.

Delivery Hero has invested heavily amid a boost in orders during the COVID-19 pandemic as it seeks to keep rivals at bay in an competitive e-commerce space.

The Frankfurt-listed company, which is not yet profitable at group level, confirmed its earlier forecast of adjusted core earnings of up to 100 million euros in the fourth quarter of 2022 for its food delivery business, including the Spanish start-up Glovo.

It also reported a 52% revenue growth to 2.1 billion euros ($2.21 billion) in the first three months of 2022 and a 31% jump in gross merchandise value, a metric key to gauging its profitability.

Earlier this month, the company launched a debt financing syndication equivalent to 1.4 billion euros.

Delivery Hero shares were up 5.5% in early Frankfurt trading, leading the German blue-chip index.

($1 = 0.9523 euros)

(Reporting by David LatonaEditing by Muralikumar Anantharaman and Tomasz Janowski)

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