Germany’s Delivery Hero fell more than 31% — its largest decline ever — after the food delivery service published projections for the year that were seen as underwhelming.
As Bloomberg News reported Thursday (Feb. 10), shares were temporarily halted for the company, with the drop wiping out more than $4.6 billion in value.
See also: Delivery Hero Eyes Profits by Next Year
“Maybe some people feel like we may have guided a little bit conservatively for the full year, but for me it’s more important that we deliver high than that we guide high,” Chief Executive Officer Niklas Oestberg told Bloomberg.
The company said a crucial measure of profitability will likely show a loss this year, and also reported numbers for the fourth quarter that fell below analysts expectations.
Delivery Hero projected total segment revenue for the year of 9.5 billion euros to 10.5 billion euros ($10.8 billion to $11.9 billion), while the average analyst estimate was 10.2 billion euros ($11.6 billion), the Bloomberg report said. The company also reported fourth quarter gross merchandise value of 9.64 billion euros ($10.9 billion), falling short of the average analyst estimate of 9.95 billion euros ($11.3 billion).
Read more: European Giants Consolidate in Competitive Ultrafast Delivery Space
Last month, Delivery Hero announced on its blog that it is expecting to break even during the latter half of 2022 and become profitable next year. Based in Berlin, the company has operations in about 50 countries in Asia, Europe, Latin America, the Middle East and North Africa.
The company has plans to expand, investing 2.3 billion euros last year to buy a majority stake last year in Glovo, the largest online delivery platform in Spain.
According to Bloomberg, Delivery Hero is also trying to fend off competition in the rapid grocery delivery sector. Oestberg said his company has been spending in Turkey to compete with startup Getir, as well as in Korea.
Learn more: Delivery Hero Ends Exclusive Restaurant Deals in Norway After Competition Probe
Last month, Delivery Hero was reprimanded in Norway over its exclusivity agreements. The Norwegian Competition Authority (NCA) and Delivery Hero settled an anti-competitive probe into Foodora, a Delivery Hero subsidiary.
Under the terms of the agreement, Delivery Hero must keep from imposing exclusive delivery agreements on restaurants until 2025.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More