Delivery Hero shares rose as much as 12% on Thursday after the loss-making German takeaway food company forecast a positive adjusted core profit margin for next year as it focuses on achieving profitability over growth.
The Berlin-based firm said it expects gross merchandise value, the total value paid by customers including VAT, delivery fees, service fees and other subsidies, for 2022 to be at the lower end of its forecast €44.7 billion to €46.9 billion range.
However, Delivery Hero forecast an adjusted core loss (EBITDA) margin of -1.4% to -1.5% of GMV, from -1.5% to -1.6% previously, and said it expects to achieve an adjusted core profit margin on GMV of more than 0.5% in 2023.
'Robust Growth Trajectory'
"We see this confirmation of a robust growth trajectory despite a plethora of ongoing headwinds as encouraging," analysts at Credit Suisse wrote in a note.
Delivery Hero's shares were up 8% at 0938 GMT, after rising as much as 12% in morning trade, following the forecasts.
One fund manager flagged short covering as magnifying the stock price move.
After making gains during the COVID-19 pandemic, Delivery Hero has focused on reaching long-awaited profitability as investor confidence in the fast growing but mostly unprofitable sector started to dwindle.
Chief executive Niklas Oestberg told Reuters that Delivery Hero is evaluating exiting a couple of markets where the company might not be able to achieve profitability, without giving further details.
However, Delivery Hero sees growth opportunity in Turkey, he said, when asked about minor investments it is making in two key markets in the Middle East and North Africa region.