Just Eat’s shares soared after the company said it expects to turn profitable this year, earlier than expected, after cutting expenses on delivery costs and operations.
Just Eat expects to generate positive adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) in the second half of this year, an improvement compared with an adjusted EBITDA loss of €134 million in the first half, the Amsterdam-based company said in a statement.
The company, which had previously guided for a negative adjusted EBITDA margin, said it is making improvements to the revenue and delivery costs it generates per order, and has been working on cutting other operating expenses. It said it expects to maintain positive adjusted EBITDA through next year.
The stock rose 9.7 per cent in Amsterdam trading. The shares had earlier gained as much as 11 per cent, the biggest jump since August 19th.
The company is among a number of food-delivery stocks that have made a comeback this quarter after the businesses, which have had to contend with a slowdown in growth after Covid-19 restrictions lifted, put more emphasis on reducing losses and improving their balance sheets.
Just Eat lowered its expectations for its gross transaction value this year due to uncertainty related to the impact of macroeconomic conditions and foreign exchange volatility on its business. It now expects the gross transaction value to grow by low-single digits in 2022, compared to a previous expectation of mid-single-digit growth.
Earlier this year, Just Eat agreed to sell its 33 per cent stake in its Latin American joint venture iFood to Prosus for as much as €1.8 billion. It is also considering a partial or full sale of its Grubhub unit following criticism from investors that Just Eat was undervalued.
The company will provide a full update on the third quarter on October 19th.