Meituan losses narrow 79pc amid difficult Q1

Business | Stella Zhai 26 May 2020

Mainland food delivery firm Meituan Dianping (3690) said its adjusted net loss in the first quarter narrowed by 79.4 percent to 216.34 million yuan (HK$235 million) from a year before, beating market expectations.

It excluded items such as share-based compensation expenses and fair-value changes.

Revenue was dragged down as tourism plunged and orders shrank amid the coronavirus pandemic.

Net losses before adjustments for the quarter ended March 31 amounted to 1.58 billion yuan, widening by 10.2 percent from a year before. Earnings before interest, taxes, depreciation and amortization plunged by 91 percent year-on-year to 41.31 million yuan.

Revenue during the first quarter this year slid 12.6 percent from a year before to 16.75 billion yuan, with that from food delivery dropping by 11.4 percent to around 9.5 billion yuan. Revenue from in-store, hotel and travel business slumped by 31.1 percent to 3.09 million yuan.

Meituan saw its food delivery orders decrease by 17.3 percent from a year before during the first quarter, dragged down by the decline in the purchase frequency of users during the pandemic, said the company. The daily average number of food delivery transactions also shrank by 18.2 percent year-over-year to 15.1 million, it said.

The gross transaction volume of food delivery slid 5.4 percent year-on-year to 71.5 billion yuan, while the number of users of the platform grew 8.9 percent to around 450 million during the 12 months ended March 31.

The order volume still had not fully recovered to its normal levels by the end of March, as some of consumer demand continued to be impacted by hygiene concerns and quarantine measures, the ongoing closure of universities, and work-from-home policies that applied to many of its high-frequency consumers, said the company.

The company's in-store business was more severely challenged compared with the food delivery segment, with much slower recovery, Meituan said. The company expected that factors including the pandemic precautions, consumers' insufficient confidence in offline consumption activities, and the risk of merchants' closure would continue to have a potential impact on its business performance.

Shares of Meituan Dianping climbed 6.16 percent higher to HK$125.80 yesterday.

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