BERLIN (dpa-AFX) - Food delivery giant Delivery Hero has kicked off the new year with growth. The group largely confirmed its annual targets but adopted a slightly more optimistic tone. Regarding adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), the MDax-listed company is now more confident, expecting to reach the upper half of the previously issued range of 910 million to 960 million euros. Last year, the figure stood at 903 million euros. Investors welcomed the news on Thursday.

On the stock market, the share price rose by around five percent to just over 20 euros by midday, leading the MDax index of mid-cap stocks. However, the stock has lost more than eleven percent of its value since the start of the year and nearly a fifth over the past twelve months. Since its record high of around 145 euros in early 2021, the share price has plummeted by almost 90 percent.

During the COVID-19 pandemic, the company's valuation briefly approached 30 billion euros, and the stock was even listed on the Dax for a time. Currently, its market capitalization stands at around six billion euros, and Delivery Hero is back in the second tier of the stock market. At prices around 20 euros, the stock is currently trading below its 2017 IPO price of 25.50 euros, though it remains 35 percent above the record low hit in March of this year.

For analyst Wassachon Udomsilpa of the Canadian bank RBC, Delivery Hero exceeded expectations, particularly with its very strong Gross Merchandise Value (GMV), demonstrating robust order momentum despite the conflict in the Middle East. This is further supported by the narrowing of the annual target range for adjusted operating profit toward the upper end.

Andrew Ross of the British investment bank Barclays also credited the company with a solid first quarter. The expert views the now-expected operating result at the upper end of the target range as a slight positive.

In the first quarter, Gross Merchandise Value increased by 7.6 percent at constant exchange rates to approximately 12.5 billion euros, Delivery Hero announced in Berlin on Thursday. On a like-for-like basis - adjusted for currency effects and excluding acquisitions, divestments, or discontinued operations - growth was 8.8 percent. According to a consensus provided by the company, analysts had expected lower figures.

Adjusted total segment revenue climbed by 17.3 percent to around 3.7 billion euros, aligning with market expectations. On a like-for-like basis, growth was 17.8 percent. Tailwinds came from the expansion of the quick-commerce business, where customers receive orders in a short timeframe. The subscription business and the expansion of in-house delivery logistics also contributed to the results.

For the current year, management is targeting an 8 to 10 percent increase in Gross Merchandise Value at constant exchange rates and on a like-for-like basis. Total segment revenue is expected to grow by 14 to 16 percent. In 2023, the group recorded a GMV of approximately 49.2 billion euros, while segment revenue stood at 14.8 billion euros.

In March, Delivery Hero announced the sale of its Taiwan business to the Singapore-based Grab group for 600 million US dollars (approximately 514 million euros) on a cash-free and debt-free basis. The deal is expected to close in the second half of the year. Delivery Hero intends to use the proceeds for debt repayment and general corporate purposes.

In December, the group announced it was reviewing the sale of business units. At that time, Delivery Hero also intended to consider strategic partnerships and capital market transactions for local subsidiaries. Furthermore, 'value-enhancing measures regarding capital structure and capital allocation' were being evaluated.

This followed reports that investors were allegedly pressuring management to sell off business segments. 'Our review of strategic options continues to progress,' said CEO and co-founder Niklas Östberg, according to the statement. The focus remains on sharpening the company's footprint and achieving high, profitable growth.

In mid-April, the US ride-hailing service Uber increased its stake in Delivery Hero by purchasing a block of shares from major shareholder Prosus. According to company data, Uber now holds between five and ten percent of the group.

The Dutch internet investment holding Prosus had agreed in August 2023 to significantly reduce its stake in Delivery Hero to obtain approval from EU authorities for the acquisition of Delivery Hero's rival, Just Eat Takeaway. However, with a 21.8 percent stake, the company remains the largest shareholder./err/niw/zb