INDONESIA’S GoTo Group slashed losses to 420 billion rupiah (S$35.2 million) for the three months to Mar 31 – a fraction of its year-ago 2.8 trillion rupiah loss.

This comes as the company continues aggressive cost cuts, while also recently handing control of its e-commerce business Tokopedia to Chinese social media giant TikTok, in a US$1.5 billion deal.

GoTo’s gross revenue for the quarter grew 18 per cent to 4.2 trillion rupiah – on a pro forma basis that assumes Tokopedia and its related logistics businesses were deconsolidated as at Jan 1, 2023.

Even as revenue grew, GoTo cut costs significantly in Q1. Reported recurring cash corporate costs declined by 30 per cent to 218 billion rupiah. Incentives and product marketing spend decreased by 31 per cent, while recurring cash fixed costs declined by 25 per cent.

With the lowered costs, GoTo’s Q1 net revenue expanded 63 per cent to 3.1 trillion rupiah. The company “continues to explore opportunities to drive efficiencies for further cost savings over future quarters”, it said in its earnings statement on Monday (Apr 29).

On the basis of adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda), GoTo posted a 102 billion rupiah loss, about a 10th of the previous year’s 898 billion rupiah Ebitda loss.

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Promising results from TikTok deal

GoTo noted that its e-commerce segment immediately turned cash flow positive after it closed its deal with TikTok on Jan 31.

“Early results have been promising with compliance requirements fulfilled and early performance proving robust,” it said in the earnings statement.

GoTo recorded 110 billion rupiah in e-commerce service fee revenues in February and March. This sum is expected to increase in future quarters “as the partnership deepens”.

Meanwhile, GoTo’s core businesses of on-demand services – which includes ride-hailing and food delivery – and fintech grew during the quarter.

Gross revenue for on-demand services expanded 12 per cent to 3.3 trillion rupiah. The segment’s adjusted Ebitda turned positive to 166 billion rupiah from the 246 billion loss a year ago.

The fintech business grew gross revenue 57 per cent to 666 billion rupiah. Its adjusted Ebitda loss narrowed to 248 billion rupiah, from a 516 billion rupiah loss previously.

GoTo last year began a growth strategy “centred on expanding our user base, increasing customer wallet share, reducing operating costs, and strengthening our partnership with TikTok”, said its chief executive Patrick Walujo.

“We expect even faster growth for the rest of the year, while also remaining committed to our profitability goals,” he added.

GoTo shares ended Monday at 63 rupiah, up 3.3 per cent.