Just Eat Delivers Q3 Profit As Cost Cuts Outweigh Lower Order Volumes

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 (GTV), a common measure for e-commerce companies, rose 2% 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.

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.

"EBITDA breakeven as soon as in Q3 is a good news, but it remains to be seen what levers are still at (Just Eat's) disposal to try to offset the likely upcoming new headwinds in 2023," Genelot said, referring to weaker trading in Europe.

The results come after a tumultuous year for the company, which has been under pressure from investors to revive its shares amid stiff competition and a fading pandemic boost. Its stock has lost almost 70% of its value this year.

Although the consumer backdrop will likely be challenging due to the economic environment, Takeaway.com is well-capitalised through the planned sale of its stake in Brazil's iFood, chief executive Jitse Groen said in a statement.

The company will hold an extraordinary shareholders meeting on Nov. 18 to vote on the deal worth $1.8 billion, it said.

In Britain and Ireland, the company's largest market, orders fell by 15% and GTV dropped by 5%, against a strong comparative period, but the group said it achieved "material" improvements in profitability.

In its second-biggest market, North America, orders fell 13% while the GTV grew by 6%, as Grubhub's partnership with Amazon showed encouraging early results, it said.