Swvl Reports First Half 2023 Financial Results
- Positive operating cash flow and net profit achieved in H1 2023
- Significant improvement in financial performance compared to H1 2022
- Successful completion of portfolio optimization program
- Enhanced strategic expansions to high revenue markets planned
- None.
Insights
The transition of Swvl Holdings Corp from a substantial operating loss to a positive operating cash flow and net profit is a noteworthy transformation, signaling a potential turnaround in the company's financial health. The shift from an operating outflow of $76.8 million to an inflow of $2.2 million, alongside a net profit of $2.1 million from a previous net loss of $161.6 million, suggests a robust operational restructuring. This is further substantiated by the increase in total equity from a deficit to a positive book value, which could be indicative of enhanced shareholder equity and potential for reinvestment in strategic growth areas.
From an investor's perspective, these figures could be interpreted as early signs of sustainable profitability, which might influence the stock's attractiveness. The sale of subsidiary Urbvan for $12 million in cash, after its initial all-share acquisition, reflects a strategic liquidity decision that could be seen as an effort to streamline operations and focus on core profitable segments. Future investments and the company’s ability to leverage its improved financial standing to penetrate high revenue markets will be critical in evaluating its long-term growth trajectory.
Swvl's strategic pivot towards operational efficiency and profitable growth is particularly relevant in the context of the current global economic climate. The mobility solutions sector is highly competitive and capital-intensive, with success often hinging on economies of scale and network effects. Swvl's positive financial results could provide it with a competitive edge, enabling further expansion into high revenue markets. This expansion strategy could potentially increase market share and drive long-term revenue growth.
It is also important to note the role of portfolio optimization in achieving these results. By divesting non-core assets and focusing on profitable segments, Swvl appears to have improved its value proposition to both customers and investors. The company's ability to execute its strategy amidst a macroeconomic downturn reflects managerial adeptness and operational agility, which are crucial competencies in the evolving mobility landscape.
The report from Swvl Holdings Corp comes at a time when many economies are facing inflationary pressures and potential recessionary trends. In such an environment, the company's ability to not only navigate but also emerge with positive cash flow and net profit is commendable. This performance could be indicative of strong demand for enterprise and government mobility solutions, as well as effective cost management and pricing strategies.
The company's focus on high revenue markets suggests a strategic allocation of resources towards more lucrative segments, which could have positive implications for economic output and employment within those markets. However, it is essential to monitor how Swvl manages its operational costs and investment in expansion to ensure that the profitability is not at the expense of future growth potential. The interplay between maintaining profitability and investing in expansion will be a delicate balance that requires careful economic analysis.
Positive Operating Cash Flow and Net Profit in H1 2023
DUBAI, United Arab Emirates, Dec. 27, 2023 (GLOBE NEWSWIRE) -- Swvl Holdings Corp (“Swvl” or the “Company”) (Nasdaq: SWVL), a technology provider for enterprise and government mobility solutions with a global footprint, has proudly announced a significant milestone in its financial performance for the first half of the fiscal year 2023. The Company has achieved positive operating cash flow and net profits, which it believes demonstrates the successful completion of the portfolio optimization program initiated last year, off the back of the global economic and capital markets environment at the time. Swvl aims to maintain and further boost profitability while resuming its enhanced strategic expansions to high revenue markets.
Key highlights from Swvl's H1 2023 financial report include:
- Operating Cash Flow: Operating cash inflows of
$2.2 million in H1 2023, compared to operating outflows of$76.8 million in H1 2022. - Gross Profit: Gross profit of
$1.8 million in H1 2023, compared to gross loss of$2.7 million in H1 2022. - Operating Profit: Operating profit of
$13.4 million in H1 2023, compared to operating loss of$56.0 million in H1 2022. - Net Profit: Net profit of
$2.1 million in 2023, compared to net loss of$161.6 million in H1 2022. - Total Equity: Total equity book value of
$5.0 million as of 30 June 2023, compared to total equity of$2.6 million as of 31 December 2022 (total deficit of$24.5 million as of 30 June 2022).
This achievement underscores the Company's commitment to financial stability, operational efficiency, and profitable growth initiatives implemented throughout the fiscal year. The successful transformation to positive cashflow and profitability is pivotal for Swvl’s enhanced strategic expansions to high revenue markets.
Please refer to appendix A below for the condensed interim consolidated financial statements.
Mostafa Kandil, CEO of Swvl, said, "I’m proud of the Swvl team and how we managed this transformation in only a few months, despite the macroeconomic downturn, achieving all the objectives set in our portfolio optimization strategy. I believe that Swvl is now creating significant value for its shareholders and is positioned for profitable growth and enhanced expansions in high revenue markets."
Post June 30, 2023, Swvl continued to make strides to further solidify its financial position. The Company completed an all-cash sale of one of its subsidiaries Urbvan, which represented approximately
Swvl remains focused on sustaining this positive momentum, further strengthening its financial position, and continuing to deliver enhanced value to its stakeholders in the future of mobility landscape.
About Swvl
Swvl is a global technology provider for enterprise and government mobility solutions. The company’s platform provides alternatives to public transportation for individuals who cannot access or afford private options. Every day, Swvl’s parallel mass transit systems are empowering individuals to go where they want, when they want – making mobility safer, more efficient, accessible, and environmentally friendly. Customers can book their rides on an easy-to-use proprietary app with varied payment options and access to high-quality private buses and vans.
For additional information about Swvl, please visit www.Swvl.com.
Forward Looking Statements
This press release contains “forward-looking statements” relating to future events. Forward-looking statements generally are accompanied by words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “plan,” “predict,” “potential,” “seem,” “seek,” “future,” “outlook” and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding future events and other statements that are not historical facts. For example, Swvl is using forward looking statements when it discusses its belief that its financial results represent the successful completion of the portfolio optimization program initiated last year, off the back of the global economic and capital markets environment at the time, that it aims to maintain and further boost profitability while resuming its enhanced strategic expansions to high revenue markets, and the belief that it is now creating significant value for its shareholders and is positioned for profitable growth and enhanced expansions in high revenue markets. These statements are based on the current expectations of Swvl’s management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on, by any investor as a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of Swvl. These statements are subject to a number of risks and uncertainties regarding Swvl’s business, and actual results may differ materially. In addition, forward-looking statements provide Swvl’s expectations, plans or forecasts of future events and views as of the date of this communication. Swvl anticipates that subsequent events and developments could cause Swvl’s assessments and projections to change. However, while Swvl may elect to update these forward-looking statements in the future, Swvl specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Swvl’s assessments as of any date subsequent to the date of this communication. Accordingly, undue reliance should not be placed upon any forward-looking statements. Except as otherwise required by law, Swvl undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. More detailed information about the risks and uncertainties affecting the Company is contained under the heading “Risk Factors” in the Company’s annual report on Form 20-F for the fiscal year ended December 31, 2022 filed with the U.S. Securities and Exchange Commission (the “SEC”), which is available on the SEC’s website, www.sec.gov, and in subsequent SEC filings.
Contact
Investor.relations@Swvl.com
Appendix A
| Condensed interim consolidated statement of financial position – As of 30 June 2023 (All amounts are shown in USD unless otherwise stated) | |||||
| (Unaudited) At 30 June 2023 | (Audited) At 31 December 2022 | ||||
| ASSETS | |||||
| Non-current assets | |||||
| Property and equipment | 872,685 | 1,270,838 | |||
| Intangible assets | 179,480 | 10,534,278 | |||
| Right-of-use assets | 587,109 | 815,646 | |||
| Sublease receivables | 215,491 | 553,029 | |||
| Deferred tax assets | 9,408,649 | 18,708,988 | |||
| 11,263,414 | 31,882,779 | ||||
| Current assets | |||||
| Prepaid expenses and other current assets | 2,584,667 | 3,298,377 | |||
| Trade and other receivables | 5,952,470 | 14,815,432 | |||
| Sublease receivables | 841,974 | 648,523 | |||
| Cash and cash equivalents | 376,768 | 1,538,347 | |||
| 9,755,879 | 20,300,679 | ||||
| Assets classified as held for sale | 13,633,830 | 5,279,098 | |||
| Total assets | 34,653,123 | 57,462,556 | |||
| EQUITY AND LIABILITIES | |||||
| EQUITY | |||||
| Share capital | 16,955 | 13,903 | |||
| Share premium | 345,942,255 | 343,435,529 | |||
| Employee share scheme reserve | 387,468 | 773,666 | |||
| Foreign currency translation reserve | (11,500,743 | ) | (4,347,257 | ) | |
| Reserve of disposal groups classified as held for sale | 3,715,263 | (492,474 | ) | ||
| Accumulated deficit | (330,485,312 | ) | (332,562,780 | ) | |
| Equity attributable to equity holders of the Parent Company | 8,075,886 | 6,820,587 | |||
| Non-controlling interests | (3,039,317 | ) | (4,191,394 | ) | |
| Total equity | 5,036,569 | 2,629,193 | |||
| LIABILITIES | |||||
| Non-current liabilities | |||||
| Provision for employees’ end of service benefits | - | 267,751 | |||
| Derivative warrant liabilities | 1,317,091 | 1,317,091 | |||
| Deferred purchase price | 70,168 | 194,093 | |||
| Lease liabilities | 1,393,484 | 1,592,111 | |||
| 2,780,743 | 3,371,046 | ||||
| Current liabilities | |||||
| Deferred purchase price | 988,038 | 7,425,488 | |||
| Accounts payable, accruals and other payables | 14,917,098 | 33,418,502 | |||
| Current tax liabilities | 472,101 | 1,027,404 | |||
| Due to related party | 556,000 | - | |||
| Loans from a related party | 139,985 | - | |||
| Lease liabilities | 596,361 | 751,015 | |||
| 17,669,583 | 42,622,409 | ||||
| Liabilities directly associated with assets classified as held for sale | 9,166,228 | 8,839,908 | |||
| Total liabilities | 29,616,554 | 54,833,363 | |||
| Total equity and liabilities | 34,653,123 | 57,462,556 | |||
Appendix A (continued)
| Condensed interim consolidated statement of comprehensive profit or loss - For the period ended 30 June 2023 (All amounts are shown in USD unless otherwise stated) | |||||
| (Unaudited) 2023 | (Unaudited) 2022 | ||||
| Continuing operations | |||||
| Revenue | 11,116,013 | 21,671,391 | |||
| Cost of sales | (9,352,628 | ) | (24,409,896 | ) | |
| Gross income/(loss) | 1,763,385 | (2,738,505 | ) | ||
| General and administrative expenses | (2,786,562 | ) | (40,163,103 | ) | |
| Selling and marketing costs | (19,967 | ) | (11,165,925 | ) | |
| Other expenses | (2,305,274 | ) | (1,906,995 | ) | |
| Other income | 16,767,714 | 4,649 | |||
| Operating profit/(loss) | 13,419,296 | (55,969,879 | ) | ||
| Change in fair value of financial liabilities | 149,430 | 62,324,575 | |||
| Recapitalization cost | - | (139,609,424 | ) | ||
| Impairment of financial assets | - | (10,000,890 | ) | ||
| Gain on disposal of subsidiaries | 967,310 | - | |||
| Write-down of assets held for sale | (10,889,775 | ) | - | ||
| Finance income | 4,834 | 77,735 | |||
| Finance cost | (61,810 | ) | (3,474,108 | ) | |
| Profit/(loss) before tax from continuing operations | 3,589,285 | (146,651,991 | ) | ||
| Income tax benefit | - | 672,857 | |||
| Profit/(loss) for the period from continuing operations | 3,589,285 | (145,979,134 | ) | ||
| Discontinued operations | |||||
| Loss for the period/year from discontinued operations | (1,511,817 | ) | (15,640,435 | ) | |
| Profit/(loss) for the period | 2,077,468 | (161,619,569 | ) | ||
| Attributable to: | |||||
| Equity holders of the Parent Company | 2,077,468 | (159,738,379 | ) | ||
| Non-controlling interests | - | (1,881,190 | ) | ||
| 2,077,468 | (161,619,569 | ) | |||
| Profit/(loss) per share attributable to equity holders of the Parent Company | |||||
| Basic | 0.32 | (1.50 | ) | ||
| Diluted | 0.25 | (1.50 | ) | ||
| Other comprehensive income | |||||
| Items that may be reclassified subsequently to profit or loss: | |||||
| Exchange differences on translation of foreign operations, net of tax | (2,945,749 | ) | (1,588,579 | ) | |
| Total comprehensive loss for the period | (868,281 | ) | (163,208,148 | ) | |
| Attributable to: | |||||
| Equity holders of the Parent Company | (868,281 | ) | (161,326,958 | ) | |
| Non-controlling interests | - | (1,881,190 | ) | ||
| (868,281 | ) | (163,208,148 | ) | ||
Appendix A (continued)
| Condensed interim consolidated statement of cash flows - for the period ended 30 June 2023 (All amounts are shown in USD unless otherwise stated) | |||||
| For the six-month period ended 30 June | |||||
| (Unaudited) 2023 | (Unaudited) 2022 | ||||
| Profit before tax from continued operations | 3,589,285 | (146,602,899 | ) | ||
| Loss before tax from discontinued operations | (1,511,817 | ) | (15,640,435 | ) | |
| Profit/(loss) for the year before tax | 2,077,468 | (162,243,334 | ) | ||
| Adjustments to reconcile profit/(loss) before tax to net cash flows: | |||||
| Depreciation of property and equipment | 513,463 | 365,340 | |||
| Depreciation of right-of-use assets | 804,836 | 703,553 | |||
| Amortization of intangible assets | 1,844,585 | 676,750 | |||
| Write down of assets held for sale | 10,889,775 | - | |||
| Other non – cash income | (16,637,801 | ) | - | ||
| Gain on disposal of subsidiaries | (967,310 | ) | - | ||
| Change in fair value of financial liabilities | (149,430 | ) | (62,324,575 | ) | |
| Provision for employees’ end of service benefits | 37,711 | 322,955 | |||
| Other non-cash expenses | - | 5,919,585 | |||
| Gain on disposal of right-of-use assets | - | (85,636 | ) | ||
| Impairment of financial assets | - | 10,000,890 | |||
| Recapitalization costs | - | 139,609,424 | |||
| Employee share scheme reserve charges | - | 257,093 | |||
| (1,586,703 | ) | (66,797,955 | ) | ||
| Changes in working capital: | |||||
| Trade and other receivables | 3,209,551 | (8,114,968 | ) | ||
| Prepaid expenses and other current assets | 779,057 | (3,988,021 | ) | ||
| Due to related party | 556,000 | - | |||
| Accounts payable, accruals and other payables | (159,887 | ) | 1,992,144 | ||
| Current tax liabilities | (555,303 | ) | 518,387 | ||
| Payment of employees’ end of service benefits | - | (439,914 | ) | ||
| Net cash flows from/(used in) operating activities | 2,242,715 | (76,830,327 | ) | ||
| Cash flows from an investing activity | |||||
| Sublease rentals received | 144,087 | - | |||
| Purchase of property and equipment | - | (1,191,592 | ) | ||
| Purchase of financial assets | - | (5,000,010 | ) | ||
| Capitalized development costs | - | (1,666,934 | ) | ||
| Payment for acquisition of subsidiary, net of cash acquired | - | (1,463,293 | ) | ||
| Net cash flows from/(used in) investing activities | 144,087 | (9,321,829 | ) | ||
| Cash flows from financing activities | |||||
| Proceeds from issuance of share capital | 635 | 32,333,801 | |||
| Proceeds from issuance of convertible notes | 788,828 | 26,336,000 | |||
| Repayment of loan from related party | (318,256 | ) | (35,066 | ) | |
| Repayment of external loan | (707,125 | ) | - | ||
| Finance lease liabilities paid, net of accretion | (870,771 | ) | (436,677 | ) | |
| Proceed from PIPE subscription | - | 39,664,000 | |||
| Finance cost paid | - | (182,996 | ) | ||
| Net cash flows (used in)/from financing activities | (1,106,689 | ) | 97,679,062 | ||
| Net increase in cash and cash equivalents | 1,280,113 | 11,526,906 | |||
| Cash and cash equivalents at the beginning of the year | 2,696,276 | 9,529,723 | |||
| Effects of exchange rate changes on cash and cash equivalents | (3,057,865 | ) | (1,752,249 | ) | |
| Cash and cash equivalents at the end of the year | 918,524 | 19,304,380 | |||
FAQ
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