By : Sarah Noureldeen – Wael Elgafary
e-finance for Digital and Financial Investments S.A.E. (“e-finance”, or the “Group”, EFIH.CA on the Egyptian Exchange), a leading technology-focused investment firm in Egypt, announced today its standalone and consolidated results for the nine-month period ended 30 September 2023. The Group’s consolidated revenues rose by 42.7% y-o-y to EGP 2,764.8 million as the Group reaped the rewards of strong performances from its portfolio of subsidiaries. Strong top-line results trickled down to the Group’s EBITDA, which expanded by 44.1% y-o-y to EGP 1,313.8 million. At the bottom-line, e-finance’s net profit after non-controlling interest (NCI) surged by 68.1% y-o-y to EGP 1,147.4 million, yielding a y-o-y net profit margin increase of 6.3 percentage points to 41.5% during the nine-month period.
e-finance’s consolidated revenues increased by 42.7% y-o-y to EGP 2,768.4 million in 9M2023 following strong broad-based growth across the Group’s subsidiaries. e-finance Digital Operations was the primary revenue growth driver as the subsidiary reported solid results across all its business segments, followed by solid results from eCards, eKhales, and enable. On a quarterly basis, the Group saw its top-line expand by 52.3% y-o-y to stand at EGP 1,029.3 million at the close of 3Q2023.
The Group’s flagship subsidiary, e-finance for Digital Operations accounted for the lion’s share of the Group’s revenues in 9M2023, with a contribution of 90%. The subsidiary achieved a 47.6% y-o-y revenue expansion to EGP 2,490.8 million after inter-company eliminations in 9M2023. The subsidiary’s performance came on the back of solid results in its transaction revenue, its cloud hosting services, as well as its build & operate services. Transaction revenue was up 59.1% y-o-y, reaching EGP 960.0 million and driven by a 76.8% y-o-y increase in variable fee revenues to EGP 576.1 million, as well as a 38.3% y-o-y rise in fixed fee revenues to EGP 383.9 million in 9M2023. In parallel, cloud hosting revenue was up 59.8% y-o-y and stood at EGP 883.6 million in 9M2023, while the subsidiary’s build & operate segment achieved a 16.0% y-o-y increase in revenue to EGP 623.6 million during the nine-month period.
Revenue at eCards witnessed a 39.2% y-o-y increase to EGP 162.6 million after inter-company eliminations in 9M2023 on the back of a 125.7% y-o-y surge in card management revenue to EGP 117.1 million. eKhales reported a 34.9% y-o-y increase in post-elimination revenue to EGP 45.5 million in 9M2023 driven by an increase in the POS terminal network coupled with higher transaction volumes, and in parallel, enable’s revenue after inter-company eliminations expanded by 23.1% y-o-y to EGP 51.1 million in 9M2023. Revenue growth was driven by higher full outsourcing revenue, as well as expansions in both IT outsourcing revenues and HR outsourcing revenues. At eAswaaq, post-elimination revenue 73.9% y-o-y to EGP 14.7 million in 9M2023, compared to the EGP 56.4 million achieved in 9M2022. The revenue drop was a result of the high-base effect of a one-off supply revenue contract reported during the same period last year.
Commenting on the Group’s performance, e-finance Chairman Ibrahim Sarhan said: “The Group has kicked-off the second half of the year on an impressive note and has booked record results across the board, with our performance across all metrics continuing to reflect our innovative approach to doing business, the operational strength of our portfolio companies, the rewards generated from our growing investments across key sectors, as well as the rising demand for digital solutions from the sectors, businesses, and people we serve.
In 9M2023, the Group achieved a top-line expansion of 42.8% year-on-year, with revenues reaching EGP 2.8 billion. Revenue growth was mostly driven by our flagship subsidiary e-finance Digital Operations, which delivered solid results across its business segments on the back of the continued investment in our cloud services offering, as well as the strong growth witnessed in transaction revenue. During the nine-month period, the subsidiary saw its variable-fee transaction revenue increase by 76.8% year-on-year as it continued to generate positive returns from the increased adoption of digital payment solutions across a number of key sectors. Parallel to this, revenue growth was further boosted by solid contributions from eCards, eKhales, and enable. At the Group’s bottom-line, we booked a milestone achievement, with e-finance’s net income surpassing the EGP 1 billion mark for the very first time, reflecting an increase of 68.5% y-o-y in 9M23 and yielding an associated margin expansion of 6.3 percentage points to 41.6%. This milestone continues to reflect our ability to generate strong returns from our higher margin revenue streams, the overarching strength of e-finance’s business model, and our team of exceptional professionals who form the bedrock of our success.
On the investments front, I am pleased to announce that our investments in the tourism sector are delivering exceptional returns, and we are aiming to increase our presence within the sector by doubling the number of touristic sites served by our digital ticketing solution. Further on this front, we are also looking to introduce new digital products with significant value-added potential to the sector. While we are aware that the current geopolitical tensions will potentially affect the number of tourists visiting Egypt in the near future, however, in the long-term, we are positive that the sector will continue to be an important pillar of Egypt’s economic growth strategy. Accordingly, the Group will continue working on capitalizing on the significant upside of the tourism sector to fuel our growth through the expansion of our footprint, as well as the introduction of new digital services and solutions.
In parallel, our associate company e-Tax continues to exceed our expectations and is on track to record a three-fold increase in its bottom-line by the end of the current year. Through its e-receipt, payroll, and core tax systems, e-Tax continues to generate exceptional returns. Accordingly, the company has become a prominent example of a highly successful investment that has completely paid back its invested capital and is now generating solid and consistent returns. Similarly, our recent investments in the agriculture sector have also started to bear fruit, and this quarter we have started recording revenues from our fertilizer distribution contract, which was signed and announced earlier this year and will significantly contribute to the Group’s performance going forward given the size and comprehensive scope of the contract.
