Just Eat Takeaway.com said on Wednesday 26 July its half-year core result swung to a bigger than expected profit thanks to cost cuts, sending its shares up 8%, even as inflation-weary customers ordered fewer meals to their homes.
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Europe's biggest meal delivery company also said chief financial officer Brent Wissink would step down in May next year "to pursue other opportunities", while the supervisory board would start looking for a successor.
The food delivery sector, which had initially boomed from the pandemic stay-at-home economy, is grappling with falling orders as cash-strapped consumers cut back spending on non-essential products and services.
Just Eat, which has been cutting costs to boost its profitability, reported adjusted core earnings (EBITDA) of €143 million in the first half of 2023, against a loss of 134 million a year earlier.
"On EBITDA, JET has delivered a strong beat and has a run-rate tracking ahead of unchanged FY23 guidance," Jefferies analysts said in a research note.
Just Eat said the increase in earnings was driven by its ongoing focus on efficiency in delivery operations and general costs saving initiatives.
The number of Just Eat's orders fell 12% to 450 million in the January-June period, which JP Morgan analysts said were "bang in line with market expectations".
The company reiterated its financial targets, including 2023 adjusted EBITDA of around 275 million euros. Given the core profit beat, J.P.Morgan said investors would likely see this as "conservative"
Additional Information
Just East said it was still exploring a partial or full sale of its struggling US-unit, Grubhub, although there was no certainty of a deal or a time frame.
The above news was followed by the following update:
UPDATE 3-Just Eat's Shares Rise As Cost Cuts Offset Falling Orders
Just Eat Takeaway.com swung to a better-than-expected core profit in the first half of the year, sending its shares up more than 4%, as cost cuts offset a drop in home delivery meal orders by inflation-hit customers.
Europe's biggest meal delivery company also said on Wednesday 26 July its finance chief Brent Wissink would step down in May next year to "pursue other opportunities".
Food deliveries boomed during pandemic lockdowns but firms are now cutting costs to boost profits as cash-strapped consumers rein in spending on non-essential items such as takeaways.
"Food delivery needs to grow up and needs to generate profits," CEO Jitse Groen said in a call with analysts. "There was a time when money was free and we could all invest in the growth of our business, that time is now behind us."
Just Eat's January-June orders fell 12% to 450 million, in line with market forecasts according to JPMorgan analysts.
It posted adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of €143 million, against a loss of 134 million a year earlier.
Analysts at Jefferies and Barclays said this was well ahead of consensus expectations.
Just Eat credited improved efficiencies in its delivery operations and general cost cuts for the stronger earnings.
In Britain, the group has laid off staff and is transitioning to a self-employed model that doesn't offer drivers benefits like paid sick leave. Groen has in the past criticised the model for creating "precarious" working conditions.
Just Eat reaffirmed its financial targets, including 2023 adjusted EBITDA of around €275 million. JPMorgan said investors would likely see this as "conservative", given the core profit beat.
The group also said it was still exploring a partial or full sale of its struggling US-unit Grubhub, but added there was no certainty a deal would happen.
Read More: Just Eat Raises Guidance, But Order Appetite Shrinks
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