Leading South African Fintech Lesaka Technologies Completes Turnaround as it Champions Financial Inclusion Across Informal Markets
Performance highlights for Q3 2023:
-
Revenue of R2.4 billion, compared to R549.8 million in Q3 2022, an increase of
337% due to the inclusion and continued outperformance of the Connect Group and momentum in the successful turnaround of the Consumer Division. - Net loss attributable to Lesaka of R104.4 million, compared to R51.9 million in Q3 2022. Operating income (loss) before PPA amortization and net interest, a non-GAAP measure and reconciled below, was income of R34.0 million, compared to a loss R146.8 million in Q3 2022, and excludes amortization of acquired intangible assets R67.3 million, compared with R0.3 million in Q3 2022.
-
Adjusted EBITDA of R137.1 million, a
221% improvement compared to the Q3 2022 loss of R112.7 million. -
Continued operating improvement demonstrated by further narrowing the operating loss to R33.2 million, representing an
77% (1) improvement from an operating loss of R147.1 million reported for Q3 2022. - Continued outperformance from the Merchant Division, delivering Adjusted EBITDA of R148.7 million.
- Successful turnaround of the Consumer Division delivering Adjusted EBITDA of R29.6 million, compared to a loss of R13.5 million in Q3 2022.
- Positive net cash generated by operating activities of R133 million, compared to an outflow of R81.3 million in Q3 2022.
Note 1 – before reorganisation costs of R91.4 million in Q3 2022 |
Lesaka Technologies has leveraged disruptive technologies to build a unique fintech platform which meets the needs of both merchants and consumers operating in informal and formal markets. More than 72,000 merchants use the Group’s cash management solutions, bill payment technologies, value-added services, business funding and card-acquiring solutions and 1.3 million consumers access Lesaka’s unsecured credit, transactional banking and micro-insurance products and services.
Lesaka's strong third quarter results were driven by the transformational acquisition and outperformance of the Connect Group in the Merchant Division and the successful turnaround of the Group’s Consumer Division, despite the persistently challenging economic environment.
The Merchant Division continues to exceed expectations and grow across all products. A key highlight of the quarter was the performance of the informal market business, Kazang, which delivered the best quarter in the business’ history.
Lincoln
Lesaka Group CEO Chris Meyer added “As a result of our improved trading, cash flow and our ability to deliver against what we have promised, our funders have, in a show of confidence, extended and increased our facilities providing us with flexibility and access to resources to execute on our growth plans. Q3 represents another quarter of growth and transformation. We are excited by the Merchant Division’s outperformance and another quarter of continued improvement and profitability in the Consumer Division where we are moving strongly on to the front foot.”
The full SENS announcement can be seen here.
Full release and webcast details at https://ir.lesakatech.com/.
The discussion of our consolidated overall results of operations is based on amounts as reflected in our unaudited condensed consolidated financial statements which are prepared in accordance with
Use of Non-GAAP Measures
Attached is the reconciliation between our GAAP measure and our non-GAAP measures.
Q3 - ended 31 March |
FY23 Q3 |
FY22 Q3 |
FY23 Q3 |
FY22 Q3 |
||||
|
ZAR’000 |
ZAR’000 |
$’000 |
$’000 |
||||
Average exchange rate for conversion from ZAR to $ |
17.93 |
|
15.61 |
|
17.93 |
|
15.61 |
|
|
|
|
|
|
||||
Net loss attributable to Lesaka (GAAP) |
(104,363 |
) |
(51,940 |
) |
(5,820 |
) |
(3,327 |
) |
Earnings from equity-accounted investments |
(305 |
) |
- |
|
(17 |
) |
- |
|
Income tax (benefit) expense |
(15,422 |
) |
7,338 |
|
(860 |
) |
470 |
|
Net loss before income tax (benefit) expense |
(120,090 |
) |
(44,602 |
) |
(6,697 |
) |
(2,857 |
) |
Interest expense |
89,372 |
|
10,788 |
|
4,984 |
|
691 |
|
Interest income |
(8,410 |
) |
(11,881 |
) |
(469 |
) |
(761 |
) |
PPA amortization (Amortization of acquired intangible assets) |
67,269 |
|
256 |
|
3,789 |
|
15 |
|
Other items, comprising: |
5,900 |
|
(101,384 |
) |
329 |
|
(6,494 |
) |
Loss on disposal of equity accounted investments |
5,900 |
|
5,402 |
|
329 |
|
346 |
|
Gain on disposal of equity securities |
- |
|
(11,241 |
) |
- |
|
(720 |
) |
Gain related to fair value adjustment to currency options |
- |
|
(95,545 |
) |
- |
|
(6,120 |
) |
Operating income (loss) before PPA amortization and net interest (Non-GAAP) |
34,041 |
|
(146,823 |
) |
1,936 |
|
(9,406 |
) |
PPA amortization (Amortization of acquired intangible assets) |
(67,269 |
) |
(256 |
) |
(3,789 |
) |
(15 |
) |
Operating loss |
(33,228 |
) |
(147,079 |
) |
(1,853 |
) |
(9,421 |
) |
Depreciation and amortization |
107,143 |
|
7,228 |
|
5,975 |
|
463 |
|
Operating loss before depreciation and amortization (Non-GAAP) |
73,915 |
|
(139,851 |
) |
4,122 |
|
(8,958 |
) |
Adjusted for: |
- |
|
- |
|
- |
|
- |
|
Stock-based compensation |
29,480 |
|
9,586 |
|
1,644 |
|
614 |
|
Lease adjustments |
12,481 |
|
13,895 |
|
696 |
|
890 |
|
Once-off items |
21,231 |
|
3,669 |
|
1,184 |
|
235 |
|
Group Adjusted EBITDA (Non-GAAP) |
137,107 |
|
(112,701 |
) |
7,646 |
|
(7,219 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230509006172/en/
Investor Relations Contact:
Phillipe Welthagen
Email: phillipe.welthagen@lesakatech.com
Mobile: +27 84 512 5393
FNK IR:
Rob Fink / Matt Chesler, CFA
Email: lsak@fnkir.com
Media Relations Contact:
Janine Bester Gertzen
Email: Janine@thenielsennetwork.com
Source: Lesaka Technologies, Inc.
