(Bloomberg) -- Grab Holdings Ltd. reported its third consecutive quarterly profit on adjusted basis and boosted its annual forecast, helped by efforts to cut costs as competition in Southeast Asia’s ride-hailing and delivery markets heats up.

Earnings before interest, taxes, depreciation and amortization were $62 million, compared with a loss of $67 million a year earlier and topping the $29.7 million analysts predicted. Full-year earnings will be at least $250 million, the company said, higher than the as much as $200 million it had predicted previously.

The Singapore-based company is trying to reach sustained profitability after years of spending to grow its market share and fend off competition. Yet Indonesia’s GoTo Group is proving a tough rival, keeping prices low and margins thin for both companies as they battle it out in the Southeast Asian market of hundreds of millions of people.

Grab, backed by Uber Technologies Inc., has slashed thousands of jobs and curbed spending to focus on the bottom line. It reiterated its forecast for slowing annual sales growth of 14% to 17% in a sign of how the once-fast-growing market is maturing.

First-quarter sales rose 24% to $653 million, while the net loss narrowed to $115 million from $250 million a year earlier.

The company’s stock has rebounded from its lows amid signs the cost cuts are having an effect. The shares are still down about two-thirds since Grab went public through a deal with a US blank-check company in late 2021.

The company is betting new initiatives, including digital banking, will boost its earnings going forward. Grab, which has partnered with financial services firms for online lending and banking in Malaysia and Singapore, expects revenues from those businesses to increase in coming years.

Read More: Grab, GoTo Are Said to Revive Talks for Ride-Hailing Mega Merger

What Bloomberg Intelligence Says

Grab’s robust margins in the deliveries and ride-hailing segments, as well as a digital-bank ramp-up, underscore bottom-line strength, even with top-line growth expected to remain slow for the rest of 2024. Cheaper versions of its on-demand services could help capture demand beyond city centers, particularly outside its home-base of Singapore. Its market leadership should continue to help improve unit economics, and its scale advantage should raise the appeal of its highest-margin advertising services to merchants.

- Nathan Naidu, analyst

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Yet the difficult market has prompted Grab and its rivals to consider aggressive options. Grab and GoTo have this year revived discussions about a merger of their core businesses, Bloomberg News reported in February, a union that could help the slash costs further.

Grab had also been linked to talks to take over the Foodpanda delivery brand in several markets, but negotiations fell through because parties couldn’t agree on deal terms. Foodpanda’s owner this week agreed to sell the brand’s Taiwan business to Uber for $950 million.

(Updates with full-year forecast starting in first paragraph)

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