e-finance for Digital and Financial Investments (EFIH) Q1 2023 earnings summary

Executive summary

• Consolidated 1Q2023 revenue rose 37.3% YoY to EGP 768.0mn; net profit after NCI increased 40.7% to EGP 281.9mn.

• Growth was driven by cloud hosting, transaction-based revenue, eAswaaq and eKhales; EBITDA margin expanded 4.1 percentage points to 43.2%.

• Separate financial statements reported revenue of EGP 308.5mn and net profit of EGP 327.9mn; the review conclusion was qualified over investment valuation and an unreviewed E-Health associate balance.

Financial highlights

• Consolidated gross profit rose 41.4% YoY to EGP 385.1mn; EBITDA increased 51.7% to EGP 331.9mn.

• Interest income increased 83.6% YoY to EGP 137.2mn; investment income declined 51.3% to EGP 18.6mn.

• Cost of sales rose 33.3% YoY to EGP 382.9mn; SG&A increased 13.9% to EGP 85.4mn.

• Separate financial statements reported gross profit of EGP 270.7mn, operating profit of EGP 269.7mn and net profit before tax of EGP 378.5mn.

Segment performance

• Digital Operations revenue before eliminations rose 40.0% YoY to EGP 716.9mn; cloud revenue grew 151.3% to EGP 207.6mn and transaction-based revenue increased 53.4% to EGP 327.4mn.

• Digital Operations build-and-operate revenue fell 11.3% YoY to EGP 174.1mn, reflecting variability in field technical support contracts.

• eAswaaq revenue rose 420.4% YoY to EGP 58.5mn; eKhales revenue increased 56.9% to EGP 15.9mn. Before eliminations, eKhales revenue rose 58.6% to EGP 15.8mn.

• eCards revenue declined 1.3% YoY to EGP 62.0mn; card production revenue fell 24.0% to EGP 36.8mn while card-management revenue rose 74.4% to EGP 25.1mn.

• enable pre-elimination revenue increased 22.8% YoY to EGP 23mn, driven by IT and HR outsourcing.