The following is a summary of the Lesaka Technologies, Inc. (LSAK) Q2 2024 Earnings Call Transcript:
Financial Performance:
Lesaka reported a Q2 revenue of ZAR313 million, a 16% year-on-year growth and 8% quarter-on-quarter growth.
The company has seen a 450% year-on-year growth and a 19% quarter-on-quarter growth, with an adjusted EBITDA for Q2 at ZAR55 million.
The EasyPay loan book increased by 26% reaching ZAR503 million.
Gross advances for the quarter were ZAR447 million, up 32% compared to the same quarter last year.
The loan loss ratio remained stable at approximately 6% on an annualized basis.
The Average Revenue Per User (ARPU) improved from approximately ZAR74 per month a year ago to over ZAR85 per month at the end of this quarter.
Lesaka Technologies' recent acquisition of Touchside was fully funded from current resources.
Group adjusted EBITDA was ZAR181 million, up from ZAR130 million in Q2 2023, a 38% increase.
Net debt-to-EBITDA ratio fell to 2.7 times.
Business Progress:
Lesaka's gross account activations rose from 60,000 to 122,000 in Q2 2024, a year-on-year increase of 188%.
Approximately 1.4 million active EPE customers were recorded at the end of the quarter, a 14% year-on-year and 7% quarter-on-quarter growth.
Policies associated with EasyPay insurance product increased to 384,000 at quarter end, up by 31% from last year and 7% over Q1 2024.
Significant interest has been registered in improving digital capabilities and service delivery, with a particular focus on the addition of relevant products and services.
Progress made with initiatives with Kazang to enhance merchant and consumer ecosystem.
The company is closely monitoring the progress of MobiKwik, considering an IPO in the Indian market.
Lesaka saw significant volume records in its Merchant and Consumer divisions, particularly with Kazang VAS and Kazang Pay Card.
Transformation of the Consumer division into a customer-oriented and sales-focused business has resulted in a record number of account activations, loan disbursements, and insurance policy sales.
Lesaka executed an acquisition of the Kazang business, Touchsides, focusing on the merchant business for further M&A opportunities.
The business expects a more favourable operating and trading environment for its merchants later in the year leading to a potential resumption in credit growth.
Lesaka expects its acquisition of Touchsides to strengthen their relationships with major clients such as AB InBev by providing valuable data insights.
More details: Lesaka Technologies IR
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