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Grab says worst of pandemic over, forecasts rebound in business

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Economy8 minutes ago (May 19, 2022 08:50AM ET)

Grab says worst of pandemic over, forecasts rebound in business © Reuters. FILE PHOTO: A driver working for the ridesharing company Grab holds a bicycle as she delivers food amid of the coronavirus disease (COVID-19) pandemic in Jakarta, Indonesia, March 15, 2022. REUTERS/Willy Kurniawan

By Nivedita Balu

(Reuters) -Grab Holdings Ltd, Southeast Asia’s No. 1 ride-hailing and food delivery firm, on Thursday forecast a rebound in its rideshare and food delivery businesses as economies recover from a pandemic-led slump.

The company’s rideshare business has suffered due to pandemic-led restrictions in several markets, but the demand is now growing with offices reopening.

“Our business will continue to strengthen as more countries pivot to living with Covid-19,” Chief Executive Officer Anthony Tan said, adding the first-quarter results showed the “resilience of Southeast Asia’s economy as we move past the worst of the pandemic restrictions.”

U.S.-listed shares of Singapore-based Grab, which operates in eight Southeast Asian countries, were up 5% in premarket trading.

Grab said it plans to enter new markets in underpenetrated outer cities and towns as consumers continue to order online even as lockdowns ease.

It has added 220,000 monthly active drivers since last year, when it started paying incentives to lure more drivers to meet growing demand.

It expects supply to stabilize in the second half of the year, and that driver incentives as a percentage of GMV to taper down.

“The mobility business is coming back very strongly. It has been one of the brightest spots coming out of the first quarter,” Chief Financial officer Peter Oey said in an interview.

For the second quarter, Grab forecast gross merchandise value (GMV), a measure of transaction volume, for the delivery segment to be between $2.55 billion and $2.65 billion, and between $950 million and $1 billion for the mobility unit.

GMV for the two units was $2.56 billion and $834 million, respectively, in the first quarter.

For the year, Grab expects GMV to grow between 30% and 35%.

Revenue for the first quarter rose 6% to $228 million, while loss narrowed to $435 million from $666 million.

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