Grab’s Q4 loss widens on heavy incentive spending

Grab Holdings Inc. marked a net loss of $1.10 billion for the fourth quarter of 2021, hit by promotional offers and higher driver incentives.

Accordingly, its quarterly loss ballooned to 77.00% from its prior-year performance.

The Singapore-based company explained that the significant spending aimed to attract drivers as ride-share demand rebounded from pandemic lows.

Eventually, it also offered aggressive food-delivery promotions as people gradually returned to dine out with the easing of Covid-19 restrictions.

Then, the loss for the entire year sharply grew to $3.56 billion from the previous $2.75 billion in 2020.

However, the extensive incentives weighed down its sales in the fourth quarter, ending on December 31.

Southeast Asia’s leading super app posted revenue of $122.00 million, representing a 44.01% year-over-year decline. This is the first report of the company since its public listing.

On a positive note, Grab’s gross merchandise volume (GMV) increased 29.00% to 16.20 billion for 2021.

The figure marked a record year for the business, surpassing the upper end of the outlook provided in September 2021.

Nevertheless, the average monthly transactions weakened 2.00% YoY to 24.10 million.

Grab attributed the downturn to the recent severe lockdowns amid the rapid spread of Omicron coronavirus.

Still, it closed the year with 27.70 million users in December, beyond any month in 2021. This result reflected a strong rebound as movement restrictions eased.

Consequently, Q4 deliveries GMV reported an annual gain of 52.00%, hitting a record high of $2.40 billion.

Then, its delivery commission rate was at 18.20%, a climb from 16.60% in 2020. Moreover, the average order values strengthened by 41.00% in 2021, compared to 2019.

Then, it expects transaction values for the March quarter to be at or below the previous three months.

Grab faces stiff competition vs. GoTo

Furthermore, Grab has to retain its market-leader position in the face of stiffer competition from GoTo.

Its rival is a powerhouse in the key Indonesian market. It came from a merger between the two most valuable startups in the country: ride-hailing Gojek and e-commerce Tokopedia.

In addition, it also competes with Singaporean financial services business Sea Limited.

Eventually, the NASDAQ-listed shares of Grab plunged 37.28% or 1.95 points to $3.28 per share on Thursday.

At the same time, the ride-hailing company now trades 54.57% or 3.94 points lower year-to-date.

Regardless, Grab still stands firmly with a market capitalization of $12.35 billion.