Delivery Hero shares sink as investors cash in on strong sales

·2-min read
FILE PHOTO: Delivery Hero's logo is pictured at its headquarters in Berlin

By David Latona

(Reuters) -Delivery Hero's shares slumped on Thursday as investors appeared to cash in on strong first-quarter results from the German online takeaway food company, whose business thrived during the coronavirus pandemic.

"I don't have an explanation for the share move," Delivery Hero Chief Executive Niklas Oestberg told Reuters after the company published its results, adding: "We are very satisfied with the quarter, but markets are currently very volatile."

Shares in Delivery Hero stock were down 10% at 1215 GMT, among the worst performers in the German blue-chip index, after rising 8% when they opened.

Several traders pointed to stock volatility and profit taking as possible causes for the swing.

The company said its first-quarter sales had jumped 52% and confirmed that it was on track for a positive adjusted core profit in its food delivery business as early as this year.

Food delivery and other companies which did well during the pandemic have seen their stocks gains erased since COVID-19-related restrictions started to ease as investors fear a slowdown in growth and higher costs from soaring prices.

Oestberg said he did not expect rising inflation to have an impact on Berlin-based Delivery Hero in terms of demand.

It said that it was on a "clear path" towards break-even for the full group in 2023 and would now focus on order volume and operational efficiency to improve its gross profit margin.

It also confirmed its earlier forecast of adjusted core earnings of up to 100 million euros ($105 million) in the fourth quarter of 2022 for its food delivery business, including the Spanish start-up Glovo.

Oestberg dismissed any interest in buying Grubhub, the U.S. arm of Amsterdam-listed peer Just Eat, which last week said it was weighing a sale, less than a year after buying Grubhub for $7.3 billion.

"We are just watching from the sidelines," Oestberg said.

($1 = 0.9505 euros)

(Reporting by David Latona; Additional reporting by Nadine Schimroszik; Editing by Muralikumar Anantharaman, Tomasz Janowski and Alexander Smith)

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