How Indonesia’s GoTo Shares declined by 4%

Indonesia GoTo Group shares have declined by 4.62% after the Indonesia annual loss for 2022 expanded. In 2021, GoTo suffered a loss of 25,9 trillion Rupiah and is now attempting to make a profit. In 2022, they faced a total loss of 40.4 trillion Rupiah ($2.63 billion).

The Share Breakdown: Losses and Gains

• Net loss of 11 trillion Rupiah goodwill deterioration related to Tokopedia and Gojek business merger.
• Revenue rose to 11.3 trillion Rupiah from 5.2 trillion Rupiah due to the adjustment of the employee turnover rate.
• In 2022, the adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) lost 16 trillion Rupiah against 16.5 trillion Rupiah in 2021.
• In 2022, the net loss was 40.4 trillion Rupiah against 25.9 trillion Rupiah in 2021.
• In the fourth quarter of 2022, the net revenue became 3.4 trillion Rupiah against the third quarter, which was 4.5 trillion Rupiah.
• In the fourth quarter of 2022, the adjusted EBITDA was at a loss of 3.1 trillion Rupiah against the previous quarter, which was 3.7 trillion.

Steps Taken to Reduce the Loss

To reduce the loss, there was a merger between Gojek, a food delivery service provider and ride-hailing, and Tokopedia, an e-commerce platform operator. This merger helped reduce the loss of adjusted EBITDA to 3.1 trillion Rupiah. The improvement in their share was a result of a good transportation system.

GoTo Group CEO said that the company focuses more on maintaining the most profitable customers because they require less energy. This strategy allowed the company to reduce allurement and product marketing by 34% or 2.8 trillion Rupiah. This should increase savings.

However, global economic headwinds are forcing high-flying tech companies to bring down their labor forces, and layout profitability over growth, including GoTo, is no exception. This month, GoTo has announced 600 dismissals. In November, it shortened its labor force by 12% or 1,300 employees.

On Monday morning, GoTo’s shares dropped 4.4%, to 108 Rupiah below their initial basic public offering price of 338 Rupiah. GoTo’s market capitalization is 127 trillion Rupiah. GoTo is struggling to be profitable. However, GoTo should turn profitable within the fourth quarter of 2023. For the full year of 2023, the tech firm foresees a loss in adjusted EBITDA of between 4.6 trillion to 5.3 trillion Rupiah.