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- Tuesday, May 2, 2023 11:23 (GMT+7)
- 11:23 5/2/2023
Cost-cutting policies proved effective as GoTo's net loss narrowed to $262 million, compared to $440 million in the first quarter of 2022.
GoTo, an e-commerce platform and super app provider from Indonesia, reported a 40% year-on-year drop in its first-quarter net loss to 3.86 trillion rupiah ($262 million) , according to Nikkei Asian Review . Net revenue also jumped 122.6% to 3.33 trillion rupiah, or about $227 million .
According to GoTo's management, the group is making progress on its profit targets. In the first quarter of 2022, GoTo had a net loss of 6,470 billion rupiah, equivalent to 440 million USD .
CEO Andre Soelistyo said the net loss was largely due to cost-cutting measures, including reducing the number of employees as well as incentive programs for sellers and users, product marketing and information technology costs.
The staff cuts alone helped the company save about 210 billion rupiah in the last business quarter.
“To date, we have reviewed and identified cost savings opportunities across more than 15,000 fixed cost items,” the executive said, adding that recurring operating expenses have decreased by Rp460 billion, or 17%, compared to the fourth quarter of 2022.
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GoTo's stock price has been sharply adjusted after several quarters of losses. Photo: TradingView. |
“The savings from the staff reductions in March will be reflected in the business results from May onwards,” he said, adding that GoTo is developing last-mile delivery services in the e-commerce segment to reduce its dependence on third parties, a move aimed at cutting costs.
Last month, the company announced another 600 job cuts, following a 1,300-job cut in November.
GoTo was formed in May 2021 through the merger of ride-hailing and food delivery company Gojek with e-commerce platform Tokopedia. Both are famous Indonesian unicorns, making this the largest M&A deal in the history of the "thousand islands country".
GoTo is set to go public in Indonesia in April 2022. But its stock has been hit hard by consistently disappointing financial results. Last year, the company reported a net loss of 40.4 trillion rupiah ( $2.74 billion ), more than three times its modest revenue of 11.3 trillion rupiah ( $768 million ).
In the first quarter of 2023, GoTo's core businesses including on-demand services (ride-hailing, food delivery), e-commerce, fintech and logistics all reported EBITDA (before taxes, fees, depreciation and amortization) losses.
But the actual results all showed an improvement from a year ago, led by Gojek’s on-demand services, which saw losses shrink by almost 90% to 200 billion rupiah. E-commerce platform Tokopedia and its fintech unit both reported combined revenue growth of more than 20%.
“We continued to make significant progress on profitability in the first quarter of 2023, with adjusted EBITDA improving 67% year-on-year and 49% quarter-on-quarter. This means we are halfway to achieving positive adjusted EBITDA in the fourth quarter of this year,” Soelistyo said.
He also shared that focusing on high-quality, profitable consumers and a disciplined approach to costs have significantly increased efficiency and brought an optimistic view on GoTo's future.
Southeast Asia has seen the rise of a number of tech companies in recent years, including Grab and Sea. Like GoTo, these giants have faced challenges in making profits, but have made progress.
More than a month ago, Sea announced its first quarterly profit in five years after going public, thanks to a restructuring effort that included thousands of job cuts and a pay freeze.
Meanwhile, Grab narrowed its annual loss to $1.74 billion in 2022, a 51% improvement from a year earlier. The company expects to break even on a group basis in the final quarter of this year on an adjusted EBITDA basis.
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Ngoc Phuong Linh
gojek revenue gojek parent company grab Tien Bo Group goto gojek ride-hailing e-commerce tmdt indonesia
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