Uber Technologies has been upgraded to investment grade by S&P Global Ratings, citing an improvement in the US ride-hailing company's profit margin and “strong commitment” to maintain conservative financial policies.
The San Francisco-based company's issuer credit rating was lifted to “BBB-", from “BB+", towing Uber from non-investment grade territory in S&P's scale, the rating agency said on Friday.
The outlook for Uber is positive, which indicates a potential for a further upgrade within the next 12-24 months if Uber's financial performance “continues to improve in line with our forecast as it navigates an evolving regulatory and technology landscape”, New York-based S&P said.
S&P also expects that Uber's “solid business execution will likely support continued credit metric improvements and free cash flow growth”.
“We expect Uber to support earnings expansion with economies of scale in its core mobility and delivery businesses and newer business strategies such as grocery and higher-margin advertising,” it added.
Uber's rating upgrade comes at a time when its bottom line is improving. Investment grade makes it easier for a company to raise funding should it wish to grow its business and expand its operations, as well as gain access to lower borrowing costs.
Part of its expansion strategy is to tap into high-growth markets, especially in the Middle East, where it owns the region's leading industry player, Dubai-based Careem.
The company plans to continue growing its operations in the wider Middle East, which is one of Uber's “leading regions” driving its long-term business strategy, Uber chief executive Dara Khosrowshahi told The National in June.
Earlier this month, the company reported revenue of almost $10.7 billion in the second quarter, about 16 per cent up on an annual basis, exceeding analysts’ expectation of $10.5 billion. Its earnings per share stood at 47 cents above the expected 31 cents.
It reported a net profit of more than $1 billion in the second quarter, up from a net loss of $654 million in the March quarter. However, it was up 158 per cent on a yearly basis.
Uber, once the most valuable start-up in the world, has posted a full-year profit only twice in its 15-year history, the last of which was in last year, which was also the first time it ended in the black since going public in 2019.
“While Uber continues to build on its short record of positive adjusted Ebitda [earnings before interest, taxes, depreciation and amortisation] and FOCF [free operating cash flow], our upgrade reflects the company's consistent gross bookings growth above 20 per cent and earnings momentum,” S&P said.
The second quarter was also Uber's sixth consecutive quarter of trip growth above 20 per cent, with drivers and couriers earning a new high of $17.9 billion in the April-to-June period.
The company’s gross bookings increased 19 per cent year-on-year to about $40 billion in the second quarter. Delivery gross bookings rose 16 per cent to more than $18.1 billion and mobility bookings increased 23 per cent to over $20.5 billion.
“They are not only strong but also sustainable … we expect it to sustain Ebitda margin above 13 per cent during this period [as] it has steadily improved Ebitda margins in the mobility and delivery segments from increasing network scale, easing driver supply incentives and lowering consumer promotions,” S&P said.
For the third quarter, Uber had predicted adjusted earnings to be between $1.58 billion and $1.68 billion, up almost 78 per cent annually. The mid-range estimate of $1.63 billion slightly exceeded analysts' $1.62 billion estimate.
“Healthy year-to-date operating performance, coupled with expectations for continued growth in the third quarter, increases our expectation that Uber will achieve our 2024 forecasts broadly in line with management's outlook,” S&P said.
“We believe Uber will stay on track to achieve its three-year growth and profit forecast introduced at its investor update in February 2024.”
Profile of Bitex UAE
Date of launch: November 2018
Founder: Monark Modi
Based: Business Bay, Dubai
Sector: Financial services
Size: Eight employees
Investors: Self-funded to date with $1m of personal savings
David Haye record
Total fights: 32
Wins: 28
Wins by KO: 26
Losses: 4
MATCH INFO
Tottenham Hotspur 1
Kane (50')
Newcastle United 0
Porsche Taycan Turbo specs
Engine: Two permanent-magnet synchronous AC motors
Transmission: two-speed
Power: 671hp
Torque: 1050Nm
Range: 450km
Price: Dh601,800
On sale: now
Globalization and its Discontents Revisited
Joseph E. Stiglitz
W. W. Norton & Company
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
COMPANY%20PROFILE
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Various Artists
Habibi Funk: An Eclectic Selection Of Music From The Arab World (Habibi Funk)
The five pillars of Islam
Sarfira
Director: Sudha Kongara Prasad
Starring: Akshay Kumar, Radhika Madan, Paresh Rawal
Rating: 2/5
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Libya's Gold
UN Panel of Experts found regime secretly sold a fifth of the country's gold reserves.
The panel’s 2017 report followed a trail to West Africa where large sums of cash and gold were hidden by Abdullah Al Senussi, Qaddafi’s former intelligence chief, in 2011.
Cases filled with cash that was said to amount to $560m in 100 dollar notes, that was kept by a group of Libyans in Ouagadougou, Burkina Faso.
A second stash was said to have been held in Accra, Ghana, inside boxes at the local offices of an international human rights organisation based in France.
