Fawry for Banking Technology and Electronic Payments (FWRY) Q2 2023 earnings summary

Executive summary

• H1 revenue was EGP 1.444bn vs EGP 1.014bn; net profit after tax rose to EGP 324.8m from EGP 98.0m.

• Q2 revenue was EGP 768.5m vs EGP 531.3m; net profit after tax was EGP 182.8m vs EGP 50.2m.

• H1 throughput rose 69% YoY to EGP 79bn; Banking Services generated 52% of consolidated revenue growth.

• Operational KPIs increased across customers, services, transactions, POS and average transaction value.

Financial highlights

• H1 gross margin was EGP 892.4m vs EGP 586.9m; operating profit was EGP 434.4m vs EGP 131.4m.

• EBITDA increased 119% YoY to EGP 305mn; adjusted net profit rose 342% to EGP 181mn.

• Adjusted net profit excludes after-tax non-recurring items, including non-cash ESOP expenses of EGP 27.5mn in H1 2023 and EGP 21.8mn in H1 2022.

• Credit interest income rose to EGP 194.3m from EGP 79.1m, mainly reflecting treasury-bill interest of EGP 172.6m vs EGP 76.7m.

• Operating costs increased by EGP 124.4m, including higher merchant fees, microfinance financing costs and cash collection costs; G&A and selling/marketing expenses also increased.

Segment performance

• Banking technology and e-payment revenue was EGP 1.276bn vs EGP 914.7m; pretax profit was EGP 407.9m vs EGP 109.7m.

• Microfinance revenue was EGP 168.1m vs EGP 99.7m; pretax profit was EGP 26.5m vs EGP 18.4m.

• ADP revenue increased 17% YoY and throughput rose 27%; telecom, ADSL, utilities and other services contributed 23%, 38%, 23% and 16% of ADP revenue growth.

• Acceptance revenue rose 110% to EGP 140mn and agent banking revenue increased 51% to EGP 154mn; instore acceptance grew 225%, online acceptance 59%, and enabled POS reached 270,000.

• Microfinance revenue grew 74% to EGP 86mn and its gross loan portfolio rose 47% to EGP 801mn; supply chain revenue increased 73% to EGP 52mn.