NEW YORK: Shares in Seize tumbled 37% on Thursday after South-East Asia’s No. 1 ride-hailing and meals supply agency posted a US$1.1bil (RM4.6bil) quarterly loss and a worse-than-expected drop in income, hit by promotional affords and better driver incentives.
Singapore-based Seize Holdings Ltd has poured cash into incentives to draw drivers as ride-share demand recovers from pandemic lows, and in addition supplied aggressive food-delivery promotions as individuals started to dine out extra with the easing of Covid-19 restrictions.
However the incentives ate into gross sales within the fourth quarter ended Dec 31 – the primary it has reported as a public firm – which slumped 44% to US$122mil (RM510mil).
“We plan to be considered and disciplined in allocating capital, as we double down on the long-term progress alternatives of our on-demand, promoting and monetary providers companies,” chief monetary officer Peter Oey mentioned in an announcement.
The loss for the entire yr ballooned to US$3.56bil (RM14.9bil) versus US$2.75bil (RM11.5bil) in 2020.
Seize is preventing to retain its market-leader place within the face of stiffer competitors from GoTo, an organization shaped by the merger between journey hailing app Gojek and e-commerce agency Tokopedia, in addition to South-East Asian tech agency Sea Ltd.
Shares of Seize skidded to their lowest ever on Thursday at US$3.09 (RM12.92), wiping off greater than US$7bil (RM 29bil) from its market worth.
Since going public in December after a US$40bil (RM167bil) merger with a blank-cheque agency, Seize’s inventory has shed practically three-quarters of its worth.
Nonetheless, the incentives managed to spice up gross merchandise quantity (GMV), a measure of transaction volumes, which rose 26%.
Seize mentioned it expects GMV progress between the second and fourth quarters of 2022 to leap 30% to 35% year-on-year, and predicted it could break even on an adjusted earnings earlier than curiosity, taxes, depreciation and amortization foundation in its meals supply unit by the primary half of subsequent yr.
“We imagine the 30% sell-off in share value is unwarranted,” Citigroup analysts mentioned in a word, including that broad market weak spot amid geopolitical instability might need prompted some buyers to chop losses.
Income from Seize’s mobility unit, which accounted for 86% of general gross sales, declined 27% within the quarter. Income from its meals supply providers unit plunged 98%. — Reuters