JAKARTA: GoTo Group reported its second consecutive quarter of net income, boosting the Indonesian ride-hailing and food delivery company’s efforts to navigate a challenging consumer market and a looming cut to ride-hailing commissions.
Net income was 350 billion rupiah (US$19.4 million) for the three months through June, compared with a loss of 297 billion rupiah a year earlier, the company said in a statement Wednesday. Net revenue, which excludes incentives to driver and merchant partners and promotions to users, climbed 31% to 5.7 trillion rupiah.
CEO Hans Patuwo is trying to revive the company by betting on fintech services – including payments and lending – to leverage the company’s user base and sustain the profitability turnaround. Meanwhile GoTo has slashed jobs and sold units to cope with tough ride and delivery competition from rivals such as Southeast Asia market leader Grab Holdings.
Shares of GoTo have plunged 85% since its 2022 initial public offering. They have been stuck at 50 rupiah apiece for weeks, which is the lowest allowed for regular trading under Jakarta exchange regulations.
“We do not believe that this reflects the fundamental value of the company,” Patuwo told Bloomberg TV in an interview, adding that the company is planning to buy back up to 3.5 trillion rupiah of stock and cancel about 2.7% worth of treasury shares. “We want to make sure that macro conditions are right so that when we do deploy this money, it will have the desired impact.”
GoTo reiterated its forecast of 3.2 trillion to 3.4 trillion rupiah in full-year adjusted earnings before interest, taxes, depreciation and amortization, lowering its outlook for on-demand services while raising expectations for its financial services arm.
Indonesia’s cap on ride-hailing commissions at 8% – down from roughly 20% previously – only took effect July 1, meaning its impact didn’t directly affect GoTo’s second-quarter results. Still, GoTo trimming its on-demand forecast signals it expects the regulation to weigh on margins in the second half.
Meanwhile, adjusted Ebitda at the fintech segment more than quintupled in the latest quarter, overtaking its ride-hailing business on that metric for the first time.
