Prosus NV shares dropped 6.4% to €38.42 after Chief Executive Fabricio Bloisi announced that increased investment in its iFood delivery platform would negatively impact the company’s adjusted earnings for fiscal 2027.
“While investments in food delivery will be significant and will impact net revenues, given how some of the spend is accounted for, we expect strong key performance indicators on orders and gross merchandise value growth,” Bloisi said in a letter to partners on Tuesday.
The Amsterdam-listed technology investor said the push to expand iFood’s product offerings will reduce its adjusted earnings before interest, taxes, depreciation, and amortization in fiscal 2027 to a range between $100 million and $150 million. The announcement overshadowed a strong performance for the year ended March 31, where the company’s e-commerce portfolio hit targets of more than $7.3 billion in revenue and over $1.1 billion in adjusted EBITDA.
The strategic decision to absorb a short-term profit hit highlights the intense competition in the global food delivery market and Prosus’s determination to secure long-term growth for iFood. The investment comes as Prosus navigates a complex web of holdings in the sector, including its recent divestment of a 5% stake in Germany's Delivery Hero for approximately €335 million, according to a Morningstar report.
A Wider Food Delivery Strategy
Prosus's focus on iFood is part of a broader, multi-billion dollar strategy in the food delivery space. The company is also targeting $3.6 billion in revenue from Just Eat Takeaway.com and expects that business to generate $100 million in adjusted EBITDA by its 2027 fiscal year, Bloomberg reported. The move to reduce its stake in Delivery Hero was a required commitment to European regulators following its acquisition of Just Eat. Prosus remains Delivery Hero's largest shareholder with a 21.83% stake.
The warning of lower profits signals that management is prioritizing market share and product development for iFood over immediate returns. Investors will now closely watch iFood’s gross merchandise value and order growth in the coming quarters to see if the strategic gamble pays off against the revised fiscal 2027 earnings outlook.
This article is for informational purposes only and does not constitute investment advice.
