JAKARTA: GoTo Group posted a narrower loss in the third quarter, bringing Indonesia’s largest tech company closer to breakeven after months of extensive cost cuts.
Adjusted loss before interest, taxes, depreciation and amortization narrowed to 942 billion rupiah (US$59 million) from 3.7 trillion rupiah a year earlier, the company said Monday.
Net revenue, which strips out incentives to driver and merchant partners and promotions to users, fell 21% to 3.6 trillion rupiah after the company made accounting adjustments related to such incentives.
Chief executive officer Patrick Walujo, who took over in June, is trying to bring GoTo to profitability on an adjusted basis by the end of the year to show the ride-hailing and e-commerce company has long-term earnings potential.
The managing partner of shareholder Northstar Group is continuing his predecessors’ campaign to reduce losses by cutting jobs, curbing promotional spending and tightening expense controls.
Like rivals Grab Holdings Ltd and Sea Ltd, GoTo is trying to generate cash after years of rapid growth.
At the same time, competition from those rivals is weighing on margins and user gains, even as more and more customers in Southeast Asia pay for the convenience of hailing a ride and getting food delivered to their door.
In a boon to GoTo’s e-commerce business Tokopedia, rival TikTok this month suspended its online-retail operation in Indonesia to comply with curbs on social commerce.
Shares of GoTo have struggled to gain momentum in 2023 as losses mounted, leaving them down more than 80% since the company’s stock-market debut last year. Investors have pummeled GoTo this month on concerns that its main businesses of ride-hailing and e-commerce are facing tougher competition.
The stock hit an all-time low of 56 rupiah this month after GoTo said major shareholders including former CEO Andre Soelistyo and Tokopedia co-founder William Tanuwijaya may reduce their stakes.