The Bank of Russia unexpectedly maintained its key interest rate at a record-high 21% , defying analysts’ expectations of another significant hike as inflation remains stubbornly elevated. The decision marks a shift toward a more measured approach in balancing economic growth and price stability. Key Details Inflation Concerns: Annual inflation climbed to 8.9% in November, well above the central bank’s 4% target , with inflation expectations reaching 13.9% in December. Policy Rationale: The central bank cited the significant tightening of monetary conditions after October’s 200-basis point hike as sufficient to resume disinflationary processes. Governor Elvira Nabiullina emphasized avoiding both economic overheating and severe slowdowns. Economic Overheating: Elevated government spending on the war in Ukraine and social programs, coupled with labor shortages and rising wages, have fueled strong domestic demand, exacerbating price pressures...
GoTo Group, an Indonesian company, reported a significantly narrower quarterly loss after transferring its e-commerce business to TikTok, reducing costs and focusing on its primary ride-hailing service.
The company, competing with Singapore’s Grab Holdings Ltd in ride-hailing and food delivery, posted an adjusted loss of 48 billion rupiah (RM13.58 million) before interest, taxes, depreciation, and amortization (Ebitda) for the three months ending June. This compares to a pro forma loss of 885 billion rupiah a year earlier.
GoTo is concentrating on profitability as user growth slows and competition from Grab and smaller regional rivals affects margins. To improve its financials, GoTo handed over its loss-making e-commerce arm, Tokopedia, to ByteDance Ltd’s TikTok in a US$1.5 billion (RM6.93 billion) deal. As part of the agreement, GoTo receives regular payments from TikTok, contributing a net 157 billion rupiah in fees for the second quarter. The company reiterated its expectation to break even on an adjusted Ebitda basis for the full year.
Despite stiff competition and shaky consumer spending, GoTo's second-quarter net revenue rose 115% on a pro-forma basis to 3.5 trillion rupiah, driven by increased spending on budget-friendly products. The company is also investing in AI, releasing its first feature — a voice assistant — earlier this month.
However, GoTo has yet to achieve profitability on a net income basis, despite significant job cuts and reductions in marketing spending. Since Patrick Walujo became CEO last June, the company has moved closer to profitability, although its shares have roughly halved.
While the TikTok deal and cost reductions are set to ease financial pressure, the challenging market has led GoTo and its competitors to consider aggressive strategies. GoTo and Grab have revived discussions about merging their core businesses, potentially reducing spending to attract users.
Key Takeaways:
- GoTo's adjusted quarterly loss narrowed significantly after transferring its e-commerce business to TikTok.
- The company reported a 48 billion rupiah adjusted loss, compared to 885 billion rupiah a year earlier.
- GoTo expects to break even on an adjusted Ebitda basis for the full year.
- Second-quarter net revenue rose 115% to 3.5 trillion rupiah.
- The company is investing in AI and released a voice assistant feature.
- Discussions about a merger between GoTo and Grab have been revived.
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