After the widening of GoTo Group’s annual net loss for 2022, the company’s shares dropped as high as 4.62% on Tuesday.
In the company’s most recent financial report, the full-year net loss came in at 40.4 trillion Indonesian rupiah ($2.63 billion) last year.
In April of last year, GoTo, a joint venture between the massive ride-hailing company Gojek and the online marketplace Tokopedia, went public on the Indonesia Stock Exchange.
According to Sachin Mittal, head of telecom & internet sector research at DBS Bank, “GoTo has managed to reduce its adjusted EBITDA loss [in the fourth quarter of 2022] to 3.1 trillion rupiah, reflecting a 16% quarter-on-quarter rise. A measure of profitability is known as adjusted EBITDA, which is EBITDA after different one-time and non-recurring charges have been subtracted.
GoTo Group CEO Andre Soelistyo stated during the business’s results call on Monday that the company concentrated more on keeping its most lucrative clients as they need less incentive.
“This technique allowed us to cut back on incentives and product promotion by 34%, or 2.8 trillion rupiah, in the fourth quarter of 2022. We anticipate that these savings will rise over the next quarters,” he added.
GoTo’s Southeast Asian rival in the ride-hailing and food delivery space, Grab Holdings, was mentioned by Mittal of DBS Bank as saying that while the decrease in losses is impressive, it falls short of the 30% improvement that company has achieved. Meanwhile, Sea Limited, which competes with GoTo’s Tokopedia, has managed to guide itself towards profitability in the fourth quarter of 2022, the speaker added.
GoTo has struggled to make a profit, therefore, management pledged more cost reduction during an earnings call in November and stated that they anticipate a “substantial percentage” of those cuts will be achieved in the first quarter of 2023.
GoTo anticipates reaching operating profitability by the end of 2023. Nonetheless, the IT company projects an adjusted EBITDA loss for the entire 2023 fiscal year of between 4.6 trillion and 5.3 trillion rupiah.