DHER Delivery Hero SE

By Ed Frankl

Shares in Delivery Hero SE jumped on Tuesday after it said late Monday that it expects its core food-delivery business to break even in the second half of 2022.

At 0845 GMT, shares were up 4.9% at EUR85.96.

The German food-delivery platform now expects adjusted earnings before interest, taxes, depreciation and amortization to be between 0 and 100 million euros ($0-$113.3 million) in the fourth quarter of 2022.

It also said investments related to its quick-commerce business should peak in the first quarter and gradually decline after, and confirmed its long-term adjusted Ebitda-to-gross-merchandise-value margin target of between 5% and 8%.

"The investment strategy has proved to be successful, and we are on a solid trajectory to turn our food delivery business profitable during the second half of this year," Delivery Hero's Chief Financial Officer Emmanuel Thomassin said.

The latest guidance is well above consensus expectations of adjusted second-half negative Ebitda of EUR125 million in 2022, although more detail is needed especially on the integration of subsidiary Glovo, analysts at Citi say.

Delivery Hero became a majority shareholder in Spain's Glovo on the last day of 2021, having raised its stake to more than 83%.

Still, the company's latest update is striking since Delivery Hero hasn't given targets for the timing of achieving a break-even since 2018, Bryan Garnier said.

"The aim seems obvious: to reassure shareholders after a complicated year in 2021--share price down circa 30%--and a tough start to the year--down 17% in the year to date--and finally reducing the risk of a hostile takeover," Bryan Garnier said.

Write to Ed Frankl at edward.frankl@dowjones.com

(END) Dow Jones Newswires

January 11, 2022 04:15 ET (09:15 GMT)

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