German online food delivery platform Delivery Hero saw revenues surge in the first half of the year as it pushes forward with its goal of breaking even next year.
Revenues for the six months ended 30 June jumped 66% to €246.5mln, while the adjusted margin on core earnings narrowed to a loss of 18% from a loss of 47% in the same period a year earlier.
Break even next year, profitable in 2019
The smaller loss was the result of reduced investment into the business as Delivery Hero – which is the world’s largest online takeaway food delivery company – looks to break even next year before moving into the black in 2019.
Chief executive Niklas Östberg said: “I think this was a very strong result that further strengthens our company.
“We are committed to full profitability in ’19. We’ve proven in the past we can make profit very easily but we’re continuing to invest. For us it’s more of an input variable than an output variable.”
Full year earnings pencilled to come in ahead of forecasts
Delivery Hero operates in more than 40 countries in Europe, the Middle East, North Africa, Latin America and Asia and reported double-digit first-half growth in all of its regions.
The Berlin-headquartered group said it expects revenue of €530-540mln for the full-year, ever so slightly above market forecasts of €531mln.
As for the full-year adjusted margin on underlying earnings (EBITDA), that is expected to improve to around minus 15-17%.
Rival Deliveroo valued at €1.6bn
The solid results comes just a matter of days after its privately-held UK rival Deliveroo announced it had raised €325mln (£285mln) in funding, which values it at around €1.6bn (£1.4bn).
The two lead investors were US funds that backed the likes of Facebook Inc (NASDAQ:FB) and Snap Inc (NYSE:SNAP) before their IPOs.
Just Eat bidding to snap up Delivery Hero’s Hungryhouse business
If you’re not overly familiar with the Delivery Hero brand, you’ll almost certainly have heard of Hungryhouse, which is their UK business.
It’s on the radar of Just Eat PLC (LON:JE.) which had a £240mln offer accepted last December but the Competition and Markets Authority is still deciding whether or not to green light the deal.
The takeover is currently the subject of a more in-depth phase 2 investigation, with regulators concerned that the merger might not be good for restaurants and customers alike.
That said, analysts at Deutsche Bank have said that they expect the deal to eventually be approved when the CMA comes back with its verdict later on this year.
