(Bloomberg) -- Delivery Hero SE shares rose after the food delivery company raised its cash flow forecast for the year.
The German firm reported third quarter figures roughly in line with forecasts, reporting €3.2 billion ($3.4 billion) in sales from €12.2 billion in gross transactions in the period, it said in a statement on Thursday. Analysts surveyed by Bloomberg expected revenue of €3.2 billion on transactions of €12.3 billion.
Delivery Hero had €1.65 billion in cash at the end of the quarter and slightly raised its forecast for free cash flow for the year to €50 million to €100 million.
Shares rose 1.9% to €39.17 at 11:00 a.m. in Frankfurt.
After a growth surge during the pandemic, food delivery apps have been hit by thinning margins and cutthroat price wars. Delivery Hero, which expanded globally via splashy acquisitions, has tried to trim costs and restructure its operations after a backlash from activist investors and regulators.
Sachem Head Capital Management built a stake in the company and won a board seat in April after criticizing its leadership for its poor performance. Three months later, Delivery Hero merged its European and Asian businesses and laid off staff.
The improved cash position offsets a slightly weaker profit outlook, according to Bloomberg Intelligence analysts Tatiana Lisitsina and Diana Gomes. Delivery Hero said it will hit the “lower end” of its previous guidance for adjusted earnings before interest, taxes, depreciation and amortization between €725 million and €775 million.
Niklas Östberg, the company’s chief executive, said he plans to create a “super app” similar to rivals in Asia, which provide a one-stop shop for services ranging from payments to food delivery. “It’s definitely a big part of our ambition to not just sell food,” he said in an interview.
In August, the company announced plans to list its Middle Eastern business, Talabat, on the Dubai stock exchange in the fourth quarter. The share sale could raise about $1 billion, Bloomberg News reported. Delivery Hero said it would retain a majority interest in the listing.
The prospect of a Talabat listing shows that some areas of the business are thriving. Bloomberg Intelligence estimated that Talabat could net an enterprise value between $9 billion and $12 billion.
During the third quarter, the company reported that sales in the Middle East and North Africa grew 23% over the prior year.
(Updates with cash flow guidance and share gains.)
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