Singapore-headquartered super app Grab announced Thursday that it posted a loss of $1.1 billion in the fourth quarter of 2021, as its revenue tumbled 44 percent year on year to $122 million on heavy incentive spending.

Grab said in a statement the loss included $311 million non-cash interest expense related to Grab’s convertible redeemable preference shares that ceased upon grab’s public listing and $328 million related to one-time public listing related expenses, of which $290 million is non-cash.

It also said the drop in revenue was due to the company preemptively invested to grow driver supply to support strong recovery in mobility demand. Consumer incentives for mobility and deliveries also increased as Grab invested in its category share and Monthly Transacting Users (MTU) growth.

As for the full year of 2021, the company’s loss stood at $3.6 billion, which includes $1.6 billion non-cash interest expense related to its convertible redeemable preference shares that ceased upon its public listing and $353 million in one-time public listing related expenses.

Its full year revenue increased by 44 percent year on year to $675 million on the back of strong growth in deliveries and financial services.

“2021 was our strongest year yet, even as we faced tougher conditions with the Delta and Omicron variants. We achieved outsized growth in both Gross Merchandise Value (GMV) and revenues while continuing to improve our adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) margins year over year, demonstrating the resilience and growing relevance of the superapp,” said Anthony Tan, Group Chief Executive Officer and Co-Founder of Grab.

“Southeast Asians are relying more and more on the Grab superapp for a multitude of daily needs. 56 percent of our users are now using two or more Grab services and the average user spend on our platform in 2021 grew 31 percent year over year. We expect 2022 to be another watershed year for Grab, as we get ready to launch our digibank in Singapore, and continue to pursue the massive opportunities in deliveries to outserve consumers with more options and better convenience,” he added.

Meanwhile, its Chief Financial Officer Peter Oey said the group maintained category leadership across all its core verticals with its food delivery business making up the majority of Southeast Asia’s online food delivery market.

“The superapp gives us significant advantages in capital efficiencies, while continuing to drive greater loyalty and retention among our users. We plan to be judicious and disciplined in allocating capital, as we double down on the long-term growth opportunities of our on-demand, advertising and financial services businesses,” he said.

According to him, the group’s segment adjusted EBITDA margins for fiscal year 2021 have improved year over year across its three core segments, and it has best-in-class margins in mobility.

“We remain laser focused on our path to profitability and will continue to improve our unit economics,” he added.

For the first quarter of 2022, Grab expects its deliveries GMV to be between $2.4 billion to $2.5 billion, mobility GMV to be between $750 million to $800 million; financial services Pre-InterCo total payments volume (TPV) to be between $3.1 billion to $3.2 billion.

Grab further expects GMV growth for each of the quarters from the first quarter to the fourth quarter of 2022 to accelerate to 30 percent to 35 percent year on year, subject to shifts in the COVID-19 environment.

Looking beyond 2022, Grab is progressing towards core food delivery segment adjusted EBITDA breakeven by the first half of 2023 and deliveries segment adjusted EBITDA breakeven by the end of 2023.

In the long term, Grab is targeting steady state adjusted EBITDA to GMV margins of 12 percent in mobility and 3% in deliveries.

Grab Fourth Quarter 2021 Financial and Operational Highlights:

• GMV grew 26 percent year on year to reach $4.5 billion, marking four straight record quarters for Grab. Deliveries and financial services demonstrated strong year-on-year GMV and TPV (Pre-interco) growth of 52 percent and 29 percent respectively. Mobility GMV declined 11 percent year on year but continues to recover with 45 percent quarter-on-quarter growth.
• MTUs grew by 3 percent year on year and 18 percent quarter on quarter to 26 million as lockdowns continued to ease, the highest since COVID-19 related movement restrictions came into force in the second quarter of 2020.
• Average spend per user increased by 23 percent year on year to $173.
• Revenue was $122 million, a 44 percent decline year on year as Grab preemptively invested to grow driver supply to support strong recovery in mobility demand. Consumer incentives for mobility and deliveries also increased as Grab invested in its category share and MTU growth.
• Loss for the period was $1.1 billion which included $311 million non-cash interest expense related to Grab’s convertible redeemable preference shares that ceased upon Grab’s public listing and $328 million related to one-time public listing-related expenses, of which $290 million is non-cash.
• Adjusted EBITDA of $(305) million was down by $203 million YoY. Adjusted EBITDA margins were (6.8) percent of GMV compared to (2.8) percent in Q4 2020. The decline is a result of the increased investments in incentives stated above, and strategic investments in areas such as tech and financial services, including the digibank as we prepare for its launch in Singapore.

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