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| Statement |
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| The recent performance of this business is encouraging, and it's becoming a meaningful contributor to our Merchant Group adjusted EBITDA as our interventions start paying off |
| Today, we are pleased to present another quarter of continued growth and improvement in financial performance |
| The second quarter is characterized by higher volumes in our Merchant and Consumer divisions over the festive season, which is buoyed performance |
| Full marks to the whole team who have all worked so hard over this period to make sure our customer needs were met and as a result, have delivered an excellent set of results |
| And I think in terms of performance of MobiKwik, the performance of the business has been strong |
| And that augurs very well for our ARPU growth |
| So this quarter really represents as Chris pointed out earlier, record numbers of sales in our EPE, in our insurance and in our loans |
| We've been playing there for a relatively short period of time and are making good progress, but we believe this will allow us to scale significantly |
| As noted, Q2 is typically our biggest quarter of the year due to the festive season and we were very pleased to see a number of volume records achieved in the month of December and for the quarter as a whole |
| Again, excellent results and congratulations |
| This is a continuation of all the plans we've been talking about, vetting in our people, training them, guiding them, building their relationship with SASSA, strong marketing presence on the ground, better customer service, improved digitization in how we engage our customers |
| On top of this, Lesaka has strong corporate governance, excellent leadership, and people passionate about our purpose of bringing financial inclusion to underserved communities |
| We have made great strides towards our vision to build the leading fintech platform, providing cash and digital solutions to small merchants and consumers in Southern Africa |
| I believe I've achieved what we set out to do when we started this journey, and I will be leaving Lesaka as a strong platform poised for growth and scale |
| We are very excited with the overall performance this quarter as we are seeing the full potential of Consumer division benefiting from the revenue growth and margin expansion from expense reductions we did in FY 2023 and the Merchant division continues growth on key KPI metrics |
| Our growth CapEx delivers a strong IRR on capital invested |
| From a cash flow perspective, we saw a continued momentum in achieving positive net cash provided by operating activities at ZAR11 million for the quarter, which includes an additional ZAR64 million in interest payments using the fund bond proceeds |
| As a reminder, seasonal trends lead to a slight stronger quarter 2 in both divisions due to the higher-than-average transaction volumes in December |
| We experienced continued improvement in our financial performance in the second quarter of 2024 with the sequential quarterly revenue and profitability improving in both Consumer and Merchant divisions |
| Adjusting for the non-operational and non-cash PPA adjustment, we delivered a positive net income before tax of ZAR22 million for the six months |
| Group costs reduced 9% year-on-year, resulting in a 71% improvement in adjusted EBITDA to ZAR343 million |
| The Consumer division delivered segment adjusted EBITDA of ZAR55 million for Q2 2024 compared to ZAR10 million for Q2 2023, benefiting from strong goals and cost saving initiatives implemented in FY 2023 |
| Our lending and insurance businesses performed exceptionally well, contributing to this very encouraging result |
| We are seeing very good momentum in EPE account activations, which is the foundation of building further annuity income in the consumer revenue base |
| In quarter 2, operating income has continued to grow, delivering ZAR43 million for the quarter |
| At a divisional level, merchant delivered a 13% revenue increase year-on-year and 6% quarter-on-quarter |
| Net income before tax, but excluding the non-operational and non-cash PPA charge, turned positive for the first time since we initiated our restructure, coming in at ZAR29 million, which we are extremely proud of |
| And this is further evidence that our strategy is paying off and that we are quickly moving towards our goals as we deliver continued improvement in our quarterly results |
| Overall, in the context of the operating environment in South Africa, I am very pleased with our quarter 2 results and the momentum we are taking into Q3 |
| These are exciting times for Lesaka with our customers continuing to demonstrate the value they see in our products and services, which underpins the resilience of our business model |
| Statement |
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| Our credit business has been negatively impacted by high interest rates and the challenging economic environment |
| In US dollars, consolidated revenue was $144 million for the quarter, up 6% compared to $136 million in Q2 2023, negatively impacted by the 7% depreciation of the rand against the dollar over the period |
| The economic environment in South Africa remains a challenge for our merchants and consumer customers |
| He joined when the company had significant cash ban, uncertainty in the outlook of the Consumer division and the need to quickly achieve scale in the Merchant division |
| However, the deteriorating performance and financial strength of many of our merchants means that they do not meet our credit criteria, resulting in fewer and smaller extensions |
| Our EasyPay enterprise market solution, which offers VAS, switching and bill payments in the formal merchant market through our retail partners experienced pressure over 2022 and 2023 |
| We started our efforts to transform the Consumer division in 2021, and it has been a very difficult journey |
| However, we expect full year revenue to be at the lower end of our guidance range |
| Fortunately, this is a lower-margin product for us, limiting the impact on profitability |
| I think as we said over the last couple of quarters, we've seen a reduction in the number of hours of load shedding |
| It's not an area that we have real traction in |
| While strict application of our credit card criteria has led to negative growth, it has protected and maintained the quality of our book through the cycle |
| Our working capital was impacted by the quarter-end falling on a public holiday and having to find an additional two days receivables in our merchant business |
| Consumer segment adjusted EBITDA for the half year was ZAR102 million compared to a loss of ZAR14 million last year, with Merchant segment adjusted EBITDA of ZAR313 million |
| Our cash vaults or cash digitalization business is primarily exposed to the former SME market, which has been impacted by load shedding, interest rates and consumer pressures more so than the informal market |
| With over 600 billers on the platform, which are embedded into all major retail systems, EasyPay has an extensive footprint that would be very difficult to replicate |
| Net income before income taxes, adding back ZAR67 million related to the amortization of acquired intangibles for the quarter, is ZAR29 million compared to a loss of ZAR7 million in the previous quarter and a loss of ZAR43 million in Q2 2023 |
| As mentioned last quarter, we have seen a significant change in product mix, with international money transfers reducing due to a change in the regulatory environment, which affected the industry and can be clearly seen in this graph |
| However, we cannot as yet count on this being a long-term improvement in power supply |
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