Just Eat back in profit despite falling orders

Just Eat Takeaway.com, Europe’s largest meal delivery company, said on Wednesday it made an underlying quarterly profit earlier than expected as efforts to cut delivery and operating expenses offset falling orders.

The total value of orders, known as gross transaction value, a common measure for ecommerce companies, rose 2 per cent in the quarter, reflecting higher prices on menus, but the number of orders weakened, in line with analysts’ expectations.

The company said adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) were positive in the third quarter, ahead of guidance issued at the start of the year. That comes after the group said in September it expected to have positive adjusted Ebitda in the second half of the year.

The food delivery sector was one of the big beneficiaries of the pandemic, but that effect has waned as consumers, faced with surging prices, have started to cut back.

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But chief executive Jitse Groen said in a media call the company did not see much impact from the cost-of-living crunch in the quarter as markets continued to stabilise after Covid-19 lockdowns.

“In terms of order behaviour of our existing customers, we don't really see an impact yet from inflation or a more difficult environment for consumers,” he said.

Mr Groen said he expected food delivery to remain popular in northern Europe because of the number of more affordable restaurants on offer on Just Eat.

Analysts said the results were broadly in line with expectations as basket size continued to increase due to food inflation, while orders remain under pressure as consumers cut spending and the company reduced promotions.

The group last posted an underlying profit in the second half of 2020, said Clement Genelot, analyst at Bryan Garnier.

– Reuters