Delivery Hero happy to keep Asia unit Foodpanda ‘forever,’ CEO says

Delivery Hero CEO Niklas Ostberg said that he’s happy holding onto the Foodpanda brand, after reports that talks of potentially selling the Southeast Asian unit had collapsed drove a huge plunge in shares.

The German food delivery firm on Wednesday reported a 9% bump in total segment revenues to 10.5 billion euros ($11.2 billion) in 2023 and adjusted earnings before interest, tax, depreciation, and amortization of 253.3 million euros.

The company also restated its guidance for annual 2024 adjusted EBITDA of between 725 million euros and 775 million euros — which would mark a tripling from 2023. The results confirm preliminary earnings from Delivery Hero, which the company issued in recent weeks in response to a sharp plunge in its shares.

Earlier this month, a report from The New Straits Times said that talks by Delivery Hero to sell its loss-making Southeast Asian business Foodpanda had collapsed, panicking investors who fled the shares out of concern that the company wouldn’t be able to cash out its ownership.

Selling Foodpanda remains an option that Delivery Hero is considering, and talks about a potential sale are ongoing, a company spokesperson said in a statement following the report.

But Ostberg said that he is happy to retain Foodpanda in Southeast Asia, suggesting that he’s confident about remaining committed to the business and doesn’t feel an urgent need to sell.

“I’m more than happy to hold onto it forever,” Ostberg told CNBC in an interview on Wednesday. “The business has turned breakeven now, [and] that’s good [that] it’s not a drag on our profitability anymore, that’s nice.”

He added, “[Foodpanda] will be one of our faster-growing regions. There’s still so much growth potential there, [and] we very much like the asset. I guess we always have to act rational towards investors if someone offers a price that is higher than what we think we can generate for it over the years.”

“By no means are we forced to sell, we are not building a business to sell it, we are building a business because we love a good service. We believe we can generate  good return for our shareholders there. We still have to act rational if someone offers a price that we feel is good value.”

Ostberg declined to comment on what price he anticipates attaining for Foodpanda, but said that he sees it fetching a “a lot of value.”

Delivery Hero shares rose 7% on news of the company’s results of Wednesday. Delivery Hero, one of Europe’s largest food delivery apps, has faced recent pressure from investors over its ability to make a solid return on businesses it’s wholly or partly acquired.

Now, Delivery Hero is attempting to claw back from the brutal share price plunge, which brought the company’s stock to its lowest level since 2022. That came after Delivery Hero announced a deal to divest its entire stake in the British food delivery company Deliveroo.

Delivery Hero at the time denied the report and pushed back on speculation that a collapse in talks was imminent.

Shareholders reacted positively to the development, but the stock has yet to recover all of its losses since the company offloaded its shares in Deliveroo.