(Reuters) – German food delivery firm Delivery Hero beat 2018 revenue forecasts despite raising them twice during the year, sending its shares as much as 7 percent higher on Wednesday.

The Delivery Hero headquarters is pictured in Berlin, Germany, June 2, 2017. REUTERS/Fabrizio Bensch/File Photo

The market for on-demand food delivery has exploded in the last few years, and Delivery Hero – the biggest company in the sector – believes there is 500 billion euros ($569 billion) of untapped potential globally.

The company, whose competitors include Takeaway.com, Deliveroo, and UberEATS, said revenue jumped 56 percent to 792 million euros last year, beating its latest guidance of 780-785 million and helped by a doubling in revenue in its Middle East and North African region.

“At the IPO (mid-2017), we said above 40 percent growth in the short to mid-term. Now one-and-a-half years later … I think, we clearly knocked this out of the park on the growth side,” Chief Executive Niklas Ostberg said on a conference call with analysts.

At 1110 GMT, Delivery Hero shares were up 6.4 percent at 36.76 euros, after touching a three month high of 36.78 euros.

The company, which operates in more than 40 countries, in December sold its delivery operations in Germany to Takeaway.com, settling a struggle for supremacy in that market.

Delivery Hero, which does not expect to be profitable at the core earnings (EBITDA) level in 2019 as it focuses on expansion and investment, reiterated on Wednesday the financial targets announced with that deal.

“Whilst there are many moving parts, this would look to us to be another solid print from DH (Delivery Hero), which is not hugely surprising given the group updated the market in late Dec-2018 (on the German deal) but is nonetheless encouraging,” Credit Suisse analysts write in a note.

Delivery Hero expects revenues to reach 1.08-1.15 billion euros this year, despite the sale of the German business.

Ostberg said the company wanted to keep its headquarters in Germany, but did not currently plan any acquisitions there.

($1 = 0.8783 euros)

Reporting by Anna Rzhevkina in Gdynia; Editing by Jan Harvey and Mark Potter


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