Indonesia's GoTo says on track for profitability despite first-quarter loss

FILE PHOTO: An employee packs goods at Goto's e-commerce unit Tokopedia's warehouse in Jakarta

JAKARTA (Reuters) - Indonesia's biggest tech company PT GoTo Gojek Tokopedia Tbk posted a first-quarter underlying loss of 102 billion rupiah ($6.28 million), on Monday, but said it was on track for profitability, helped by its partnership with TikTok.

It blamed the first-quarter loss, compared with 1.6 trillion rupiah a year ago and a 77 billion rupiah profit in the final quarter of last year, on planned investment and seasonal slowness in the on-demand services segment in January and February.

"We expect even faster growth for the rest of the year, while also remaining committed to our profitability goals," Group CEO Patrick Walujo said.

China's TikTok in December bought a majority stake in GoTo's e-commerce unit Tokopedia.

"Early results have been promising with compliance requirements fulfilled and early performance proving robust," the company said in a statement.

The company's profitability, it said, will be driven by lower costs in running Tokopedia and increased income as Tokopedia is expected to grow faster compared with overall expansion in Indonesia.

It also said GoTo expects to secure growth in broad user demographics in its core on-demand services and fintech segments across the Indonesian market.

"We will continue to invest prudently, while maintaining cost discipline as we aim to ensure that our growth can be sustained over the long term,” Group CFO Jacky Lo said in a statement.

Lo also said the company was on track to meet its target to maintain adjusted EBITDA profitability for the full year of 2024.

Meanwhile, the company also posted net revenues of 4.079 trillion rupiah for the first quarter of 2024 after reporting full-year net revenues of 14.79 trillion rupiah in 2023.

As part of last year's TikTok agreement, GoTo entered into a conditional sale and purchase agreement to divest ownership of its delivery and fulfilment unit under GoTo Logistics that supports Tokopedia.

After the transaction is completed, GoTo logistics will be deconsolidated from the company, it said in a statement, adding the measure will not impact the GoSend delivery service segment.

($1 = 16,250.0000 rupiah)

(Reporting by Ananda Teresia; Editing by Kanupriya Kapoor and Barbara Lewis)