GoTo Hits Profitability Target After Job Cuts Help Curb Costs
(Bloomberg) -- GoTo Group said it reached its first-ever profit on an adjusted basis, a milestone for the Indonesian ride-hailing and food delivery company trying to convince investors of its money-making potential.
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The Jakarta-based company hit positive adjusted earnings before interest, taxes, depreciation and amortization in the fourth quarter, it said in a statement Wednesday, without disclosing any figures. GoTo also said full-year loss on that basis was smaller than 3.8 trillion rupiah ($241 million), or narrower than its previous forecast.
Profitability, even on adjusted basis, is a big step in GoTo’s effort to prove to investors it can make money. Following years of rapid growth, the company has turned its focus on the bottom line after its shares lost more than 70% since its initial public offering in Jakarta in 2022. The company took drastic measures over the past two years to improve its profit margins, including cutting thousands of jobs and slashing marketing spending.
In December, GoTo agreed to relinquish control of its e-commerce arm Tokopedia in a tie-up with ByteDance Ltd.’s TikTok, after the social media company said it would invest $1.5 billion in a joint venture that it’ll be in charge of. That deal has now been completed, GoTo said. The company agreed to the pact to avoid further market-share losses in online shopping in Indonesia, Chief Executive Officer Patrick Walujo said earlier.
GoTo and its Southeast Asian internet peers Grab Holdings Ltd. and Sea Ltd. are competing for customers as online services gain popularity in the region. But stiff competition and consumers’ limited spending power has hurt their ability to generate sustainable profits. Sea reached its first net income in the final quarter of 2022, while Grab reported an adjusted profit in the third quarter of last year.
GoTo also said it may buy back its shares, without providing an amount or timing. The company is set to report detailed fourth-quarter and full-year earnings in March.
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