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E-Finance posts strong growth in 1Q 2023: State-owned payments firm E-Finance’s adjusted net income rose 41% y-o-y to EGP 281.9 mn 1Q 2023, according to its earnings release (pdf). Revenues rose 37% y-o-y to record EGP 768.0 mn, largely on the back of growth in the firm’s cloud-hosting and variable-fee transactions businesses.
Digital operations led revenue growth: Growth was driven primarily by the company’s flagship business, E-Finance Digital Operations, which accounted for 93% of the group’s revenues during the quarter. Revenues at Digital Operations rose 40% y-o-y to EGP 716.9 mn thanks largely to the firm’s “lucrative and fast-growing cloud hosting revenue stream,” where revenues more than doubled to EGP 207.6 mn. Transaction-based revenue was up 53% to EGP 327.4 mn, driven by a 78% increase in variable-fee transaction income. Meanwhile, e-commerce subsidiary E-Aswaaq increased revenues more than fivefold to EGP 58.5 mn.
What they said: “Our profitability for the period was driven by the strong results generated by our higher margin revenue streams, as well as management’s diligent and successful efforts at mitigating and reducing our exposure to the impacts of Egypt’s currently unfavorable FX environment,” said Chairman Ibrahim Sarhan.
Looking ahead: E-Finance aims to open a Saudi branch in Riyadh in 2H 2023 after signing anMoU last month to partner with Saudi-based Thiqah Business Services. Saudi sovereign wealth fund PIF became the single-largest shareholder in E-Finance last year after it acquired a 25% stake.
FAWRY NET INCOME TRIPLES-
E-payments giant Fawry’s adjusted net income rose 242% y-o-y to EGP 146.8 mn in 1Q 2023, according to the company’s earnings release (pdf). Revenues were up 40% y-o-y to EGP 675.7 mn. Revenue growth was driven by expansion in the company’s banking services segment, Fawry said, while cost control measures led to higher margins and increased profitability.
Banking services accounted for 50% of Fawry’s revenue growth during the quarter, with the segment booking revenues of EGP 249.9 mn, up 63% y-o-y and accounting for more than a third of the company’s overall revenues. The microfinance segment also posted strong growth, with revenues rising 74% to EGP 82.3 mn, accounting for 18% of top-line growth and 12% of overall revenues. Supply chain solutions — while still a relatively small segment of the business — saw revenues jump 81% y-o-y to EGP 44.6 mn, making up 10% of revenue growth.
What they said: “The successful expansion of our top-line and the consistent effort to control costs at all levels despite challenging economic circumstances has enabled us to expand our margins and add another quarter to Fawry’s success story,” CEO Ashraf Sabry said in the release.
