With a strong quarterly result behind it, the food delivery service Delivery Hero has raised its full-year targets.

"We've had a great start to 2024," said CEO Niklas Östberg on Thursday. The previously weak Spanish subsidiary Glovo is also moving towards the break-even point, which will probably be exceeded in the second half of the year. His company is well on track to continue growing profitably, he added.

This outlook was well received by investors. Delivery Hero shares, which are listed in the second-line index MDax < .MDAXI), rose by up to ten percent.

In an interview with the news agency Reuters, CFO Emmanuel Thomassin cited surprisingly high income from advertising from consumer goods manufacturers and restaurants as one reason for the strong figures. At 30 percent, he observed the highest sales growth in the Middle East and North Africa, where Delivery Hero delivers household goods and medicines in addition to food. "Customer engagement and order frequency are growing faster than the competition."

At the start of the year, the gross merchandise value (GMV) increased by a good eight percent to 12.13 billion euros and consolidated sales by 21 percent to 3.02 billion euros. Both figures were above market expectations, praised analyst Silvia Cuneo from Deutsche Bank. Growth had accelerated in almost all regions. She also emphasized the confirmed annual target for an operating profit of between 725 and 775 million euros. The market is currently expecting Group sales of twelve billion euros and an operating profit of 750 million euros for 2024. The experts at UBS Bank believe that the food supplier can even achieve 793 million euros thanks to strong business in South Korea.

EASING OF THE LIQUIDITY SITUATION

When presenting the business figures for the first quarter, Delivery Hero also pointed out that liquidity stood at 1.8 billion euros. A few months ago, the failed sale of the loss-making Southeast Asian business of the subsidiary Foodpanda had fueled speculation about a capital increase at Delivery Hero, as liabilities in the billions will have to be refinanced in the coming years.

However, Delivery Hero is confident that it will be able to generate a sufficiently high cash inflow (cash flow) to service its debts. In the meantime, the company has also taken out fresh loans to buy back some of the convertible bonds it has issued.

In addition, stock market analysts continue to speculate about a possible merger between Delivery Hero and its competitors after Sachem Head secured shares, according to insiders. The activist investor is also a shareholder in competitor Deliveroo.

(Report by Hakan Ersen; with the assistance of Linda Pasquini, edited by Ralf Banser. If you have any queries, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)