TIDMKSPI
RNS Number : 5769T
JSC Kaspi.kz
25 July 2022
Kaspi.kz 2(nd) Quarter & 1(st) Half 2022 Financial
Results
Kazakhstan, 25 July 2022 - JSC Kaspi.kz ("Kaspi.kz", "we", or
the "Company") which operates the Kaspi.kz Super App, Kazakhstan's
leading mobile Super App, today publishes its unaudited
consolidated IFRS financial results for the quarter and half ending
30 June 2022.
Second quarter & first half 2022 highlights
-- Super App DAU increased 25% year-over-year to 7.4 million, a
substantially faster rate than MAU, which increased 16%
year-over-year to 11.8 million. DAU to MAU engagement up to
63%.
-- Average monthly transactions per active consumer up 42%
year-over-year to an all-time high 55.8.
-- Kaspi Pay continues to scale at a rapid rate, significantly
increasing its number of merchants.
o Active merchants up 159% year-over-year to reach 356K.
o 383K active Kaspi Pay POS devices by June 2022, up 113%
year-over-year.
o By number of transactions, Kaspi Pay accounted for 89% of all
Kaspi.kz in-store transactions, with third-party acquiring down to
just 11%.
o With a large, expanding and highly engaged merchant base, we
expect rapid growth in earlier stage merchant services over the
next few years including Kaspi Delivery, Kaspi Marketing and
financing for merchants and SMEs.
-- Kaspi e-Grocery, in conjunction with Kazakhstan's no.1
grocery retailer Magnum, is seeing extremely high consumer adoption
and positive consumer feedback.
o e-Grocery GMV up 12.4x year-over-year.
o Active consumers up 7.8x year-over-year.
-- Kaspi Pay B2B emerging as a new transformative payments
proposition for wholesalers, with B2B RTPV volumes up 5.7x
year-over-year.
-- From start-up two years ago, Kaspi Travel is Kazakhstan's N1
online flight and rail booking service. GMV reached 10% of
Marketplace GMV. With Travel, e-Commerce and m-Commerce,
Marketplace now includes three large, diverse and fast-growing
propositions.
-- The breadth and depth of Marketplace's product proposition significantly enhanced.
o Marketplace merchants up 243% year-over-year to reach
198K.
o E-Commerce SKUs up 2.2x year-over-year to 2.1 million.
-- We also continue to scale Kaspi Smart Logistics Platform,
with total orders delivered up 142% year-over-year to 3.5
million.
o 96% of deliveries free for the consumer.
o 53% of orders delivered in <=2 days.
o 1,684 Kaspi Postomats operational in June across 20 cities,
accounting for 12.4% of orders delivered. At scale we expect Kaspi
Postomats to materially improve e-Commerce delivery economics.
-- During the first half of 2022, Kaspi.kz's business model
continued to deliver strong financials. First half 2022 Kaspi.kz
consolidated adj. net income up 39% year- over-year to KZT252
billion.
-- In the first half of 2022 we took a cautious approach to
consumer credit origination (TFV) and reduced Marketplace Platform
promotional campaigns. However, with credit quality extremely high,
we are now accelerating TFV growth and expect business as normal
credit approval levels in the second half of the year.
-- July's Kaspi Juma was our biggest Marketplace promotional
ever with GMV up 175% compared to our previous event in 2019. We
plan to repeat Kaspi Juma, in the final quarter of this year. With
promotional activity back to normal we expect faster Marketplace
GMV growth and higher take-rate dynamics in the second half of the
year.
-- Upgrading Payments RTPV growth to around 50% year-over-year
and net income profitability to above 60% in 2022.
-- Upgrading Marketplace GMV growth to around 55% year-over-year in 2022.
-- With our business continuing to deliver and the outlook
improving, we now expect Kaspi.kz's consolidated adj. net income to
grow between 27-30% year-over-year in 2022, at the top-end of our
previously communicated adj. net income guidance range of
20-30%.
-- In the first half of 2022 our faster growing, high
profitability Payments and Marketplace Platform's reached 55% of
consolidated net income. The contribution from our Fintech
Platform, will reduce again in the second half of the year.
-- Based on our first half 2022 results, our Board of Directors
has proposed a dividend of KZT500/GDR, subject to shareholder
approval.
-- In April our Board of Directors approved a 3-month GDR
repurchase program of up to $100 million. At expiry we had managed
to repurchase GDR's equivalent to $51 million. Our Board has now
approved a new 3-month repurchase program of up to $100 million. We
continue to believe our market capitalisation materially
undervalues Kaspi.kz and are determined to eliminate the valuation
discount upon which our GDR's trade. Delivering consistently strong
earnings growth and regularly returning excess cash are key pillars
of our approach and we will use the combination of both dividends
and buybacks to create value for our shareholders.
To the shareholders of Kaspi.kz:
Last week we held Kaspi Juma, our nationwide shopping festival.
This was the first Juma since the start of the Covid-19 pandemic
and it surpassed all our expectations. GMV increased 175% compared
to our previous event in 2019. We are excited about this dramatic
increase, which proves again that the relevance of our Super App to
both consumers and merchants continues to increase. We'll talk in
more details about Kaspi Juma at our third quarter results.
Returning to our second quarter results, yet again Kaspi.kz's
business model has proven itself. The message from our performance
is clear. Whether times are good or more challenging, we are always
there for our customers, continually innovating to make their
everyday lives better. I'm confident that our execution driven
management team will deliver for consumers, merchants and very
importantly you our shareholders, no matter what the external
environment throws at us.
The underlying growth drivers of our business remain strong.
Merchant onboarding to Kaspi Pay, m-Commerce and e-Commerce
increased 159% year-over-year, to reach 356K active merchants.
Transactions per consumer reached 55.8 per month, with revenue
generating payment transaction (RTPV) and Marketplace purchases up
63% and 104% year-over-year respectively, during the second
quarter. The combination of a rapidly growing merchant base and
high levels of consumer engagement, will ensure that we continue to
deliver fast RTPV and GMV growth in the second half of 2022 and
beyond. Having reached 55% of net income in the first half, we
expect our Payments and Marketplace Platforms to continue growing
fast and contribute to a significantly larger share of profits
every quarter.
Considering Payments and Marketplace Platforms growth, I'm
pleased to confirm that we now expect Kaspi.kz's RTPV to grow
around 50%, GMV to grow around 55% and consolidated adj. net income
to grow by 27-30% year-over-year in 2022, at the top end of our
previous 20-30% guidance.
During periods of increased uncertainty, we always remain
focussed on our long-term strategy, which for us means relentlessly
executing on our mission to develop innovative products and
services that improve the everyday lives of consumers and
merchants. Kaspi Travel is very good recent example of our ability
to execute on this.
It took us just 2 years to bring Kaspi Travel from a start-up to
the N1 airline and railway booking service in the country, selling
3.1 million tickets in the second quarter. Kaspi Travel has now
reached 10% of Marketplace GMV. We have the same ambition for our
new businesses, e-Grocery and B2B Payments. e-Grocery is scaling at
a phenomenal rate and has the potential to be transformative to our
relationship with consumers and financial growth over the next
couple of years. B2B, which is a completely new market opportunity
for us, now accounts for 2% of RTPV, which given the absolute scale
of our payments volume is a substantial achievement, in very short
period of time.
All in all, we're on-track for another good year and remain
upbeat about our mid-term growth outlook. However, we also continue
to believe that our current market capitalisation fails to
adequately reflect the high growth, highly profitable and cash
generative nature of our unique company. Narrowing the valuation
discount upon which our GDR's trade is a top priority and we will
leave no stone unturned.
To narrow the discount, we see the combination of buybacks and
dividends as helpful tools. In April we commenced a 3-month GDR
buyback of up to $100 million. Stock trading liquidity has been a
constraint but this program has now concluded, with GDR's
equivalent to $ 51 million repurchased. Our Board has once again
allocated up to $100 million for a new 3-month buyback program.
Given our valuation and growth outlook, we believe buybacks have
the potential to be substantially earnings and dividend accretive
over time.
Subject to shareholder approval our Board of Directors has also
approved a dividend equivalent to KZT500/GDR. While we will always
prioritise investments in growth, in the event of excess capital we
will return this to our shareholders. Nothing has changed in terms
of our long-term approach to capital allocation.
We also remain committed to taking steps to ensure Kaspi.kz is
listed on the most appropriate exchange. Admittedly the timing of
this event is difficult to predict but we stand ready to act as
soon as market conditions are right.
Kaspi.kz is at the forefront of the new digital revolution,
redefined by Super Apps. The combination of our scale with
consumers and merchants, reinforced by our Super App strategy, puts
us in a completely unique position to capture the multi-year
structural growth opportunity offered by digitalisation in
Kazakhstan and over time across the broader region.
As always, I would like to thank our team for their incredible
efforts and our shareholders, for your ongoing trust and
support.
Mikheil Lomtadze
Kaspi.kz CEO and co-founder
Kaspi.kz 2Q 2022 user & engagement highlights
11.8 million Kaspi.kz Super App users. 56 transactions per
consumer/month
Kaspi.kz's Super App is Kazakhstan's most popular Super App and
gives our Payments, Marketplace and Fintech Platforms unrivalled
competitive advantages. During the second quarter of 2022, Super
App user and transaction levels continued to hit all-time
highs.
DAU (Daily Active Users) increased 25% year-over-year to 7.4
million, a substantially faster rate than MAU (Monthly Active
Users), which increased 16% to 11.8 million.
Highly relevant transaction linked products and services make
the Kaspi.kz Super App integral to consumers' daily lives. The
ratio of DAU to MAU was 63%, which is amongst the highest levels of
user engagement of any Super App globally and another step-up,
compared to 59% in the second quarter of 2021.
Growing adoption of our existing products, along with new
product launches facilitates higher engagement and transactions
across more areas of regular household spending. Average monthly
transactions per active consumer, increased by 42% year-over- year
to 55.8 from 39.3, during the second quarter of 2021.
We continue to prioritise onboarding as many merchants, as
rapidly as possible to drive future engagement and transactions
even higher. During the second quarter of 2022, growth in the total
number of active merchants increased 159% year-over-year to reach
356K. We expect growth in our merchant base to remain at elevated
levels for some time to come.
We design best-in-class digital products to monetise
transactions volumes. During the second quarter of 2022, RTPV
transactions increased 63% year-over-year and Marketplace purchases
increased 104%. High levels of growth in monetizable transactions,
despite economic volatility illustrate the important role we play
in the lives of consumers and merchants and the potential to keep
growing monetization.
Products like Kaspi QR, m-Commerce and Instant Invoicing all
facilitate merchant acquisition. In turn, as our merchant base
scales, we will increasingly grow earlier stage merchant services
including B2B payments, Kaspi Delivery, Kaspi Marketing and
financing for merchants and SMEs. These products all help our
merchants invest in their business, increase their sales, reach new
customers and the growth opportunity ahead is substantial.
Similar to our merchant strategy, products like P2P, Bill
Payments, BNPL, Kaspi QR and our GovTech Platform are the basis of
our day-to-day relationship with consumers. Going forward, we will
grow less mature services including m-Commerce, e-Commerce, Kaspi
Travel and our e-Grocery proposition. These services all help our
consumers discover the products they need, at the best possible
prices, from local merchants, with the convenience of free
delivery, ultimately saving consumers time and money. With consumer
penetration across our full range of Super App services still low,
here too the opportunity ahead remains significant.
In 2022 and beyond, we will prioritise Kaspi e-Grocery, which is
a significant future opportunity. Initial consumer feedback is
extremely positive and if we're successful, e-Grocery can have
dramatically positive implications for Super App engagement and
Marketplace GMV growth. During the second quarter of 2022 e-Grocery
GMV increased 12.4x year-over-year, with the number of customers up
7.8x.
From start-up status, Kaspi Travel is now Kazakhstan's N1 online
flight and rail booking service. Kaspi Travel reached 10% of
Marketplace GMV in the second quarter of 2022 and going forward we
will continue to broaden Kaspi Travel's offering. Combined with the
recovery in international travel, we expect Kaspi Travel to remain
additive to Marketplace growth for some time.
Kaspi B2B, which was born out of Bill Payments, is an example of
how we can grow transactions by targeting new segments, in this
case wholesalers.
We will also continue to launch new services and our product
pipeline looking into the rest of this year and beyond is as
healthy as always.
Kaspi.kz 2Q and 1H 2022 financial highlights
Revenue up 38% and adj. net income up 32% YoY in 2Q22
During the second quarter of 2022, total revenue, increased 38%
year-over-year to reach KZT296,587 million. For the first half of
2022, total revenue increased 41% to reach KZT560,908 million.
Our Payments Platform continues to deliver excellent results due
to the success of Kaspi Pay. In Marketplace, having significantly
expanded our Marketplace merchant base, demand remains strong with
m-Commerce and e-Commerce transactions up 87% and 103%
year-over-year respectively, during the second quarter. Kaspi
Travel GMV growth is additive to overall Marketplace growth. Higher
Fintech origination throughout 2021, translated into strong revenue
growth in the first half of 2022, but our cautious approach to TFV
origination more recently, will lead to more moderate Fintech
revenue growth in the second half of the year.
During the second quarter of 2022, adj. net income increased 32%
year-over-year to KZT135,273 million. Adj. net income profitability
decreased to 45.6% from 47.8% in the second quarter of 2021. For
the first half of 2022, adj. net income increased 39% to reach
KZT252,386 million, with 45% profitability broadly stable
year-over-year.
As our proprietary payments network scales, we continue to
benefit from our Payments Platform's operational gearing. This was
however partially offset by slightly lower Marketplace
profitability, due to our planned step-up in investment in free
consumer delivery and reduced promotional activity. In Fintech, the
combination of lower yield and higher funding costs all lowered
profitability, though here too trends remain consistent with our
full-year 2022 guidance.
With our faster growing and higher profitability Payments and
Marketplace Platforms continuing to deliver strong bottom-line
growth, they accounted for 55% of adj. net income in the first half
of 2022, up from 50% in the same period in 2021. In the second half
of 2022, we expect the contribution to net income from our Payments
and Marketplace Platforms to increase further.
Our cash generation capacity remains as strong as ever. As a
result, our Board of Directors has now approved a new up to $100
million GDR buyback program. This follows on from the GDR's worth
$51 million repurchased between April and July. In addition,
subject to shareholder approval, our Board has proposed a dividend
equivalent to KZT500/GDR.
Payments Platform
RTPV up 53%, revenue up 54% & adj. net income up 60% YoY
Our Payments Platform has always offered consumers a highly
convenient way to shop, pay bills and make peer-to-peer (P2P)
payments via the Kaspi.kz Super App. As has been the case globally,
in Kazakhstan there has been a huge shift to digital and mobile
payments, with consumers demanding a seamless and integrated
digital experience no matter where they shop. Kaspi Pay is our
response to help merchants exceed their customers' expectations and
grow their businesses.
Payments Platform products are also amongst our most important
tools to attract new customers and increase engagement, making
their popularity fundamental to Kaspi.kz's growth outlook. We
continue adding new opportunities to spend and pay, which is a
function of new merchants and product development.
In the second quarter of 2022, Payments Platform merchant
onboarding remained strong, up 164% year-over-year to 356K
merchants. The benefits of this will be seen in the second half of
2022 and beyond as existing merchants shift more of their volumes
to Kaspi Pay, leading to high ongoing growth in RTPV.
In the second quarter of 2022, there were 383K active Kaspi Pay
POS devices, up 113% year- over-year.
By creating our own closed-loop proprietary payments network, we
have eliminated the need for third-party processors and Kaspi Pay
offers merchants and consumers at scale, a best-in-class end-to-end
experience. This resulted in Kaspi Pay acquiring accounting for 89%
of all Kaspi Gold POS in-store retail transactions during first
quarter of 2022, with third-party acquirers now only processing 11%
of our transactions.
As we add new opportunities to pay, consumer growth has remained
robust. Payments Platform active consumers increased 20%
year-over-year, to reach 10.5 million, in the second quarter of
2022.
During the second quarter of 2022, Total Payment Value (TPV)
increased 38% year-over-year to reach KZT16.4 trillion. Revenue
Generating TPV (RTPV) increased 53% to reach KZT4.6 trillion. RTPV
continues to grow significantly faster than TPV, a trend that is a
result of our success rolling out Kaspi POS devices. Going forward,
we will continue working hard to ensure Kaspi Pay keeps playing its
part in Kazakhstan's transition to a cashless digital economy. For
the first half of 2022, TPV and RTPV increased 41% and 56% to
KZT29.2 trillion and KZT8.2 trillion respectively. Average interest
free balances increased 23% year-over-year in the second quarter of
2022 to KZT593 billion.
During the second quarter of 2022, Payments Platform revenue
growth increased 54% year- over-year to reach KZT76,157 million.
For the first half of the year, Payments Platform revenue growth
increased 56% to reach KZT139,744 million. Take-rate in the second
quarter and first half of 2022 was broadly stable year-over-year at
1.2%.
Payments Platform adj. net income increased 60% year-over-year
to KZT47,755 million, with net income profitability of 62.7% up
significantly from 60.3% in the second quarter of 2021. Payments
Platform profitability continues to benefit from our proprietary
payments network's operational gearing. For the first half of the
year, Payments Platform adj. net income increased 65%
year-over-year to reach KZT87,193 million, with net income
profitability increasing to 62.4% from 58.8% in the same period
last year.
In 2021, Kaspi Pay B2B emerged as a new and fast-growing
component of our RTPV. Our B2B proposition is primarily targeted at
wholesalers and small merchants, allowing them to settle invoices
instantly and conveniently. During the second quarter of 2022, B2B
RTPV increased 5.7x year-over-year to KZT102 billion and reached 2%
of RTPV. Although it is still early days, we believe Kaspi Pay B2B
can emerge as a transformative product, put us in pole position to
design other innovative merchant products and is another way we can
help Kazakhstan's SMEs go from strength to strength.
For the remainder of 2022, we will continue to ramp-up our
merchant base and expect this to 1) contribute to ongoing strong
growth in RTPV and 2) a more diverse mix of Payments Platform
revenue streams including B2B payments. We continue to expect
growth in average balances of around 20% year-over-year. This
moderation from prior years is a natural consequence of growth in
Payments Platform consumers stabilising but is none the less
robust, as opportunities to transact expand.
With strong top-line trends continuing, we now expect Payment's
Platform to deliver 2022 RTPV growth of around 50% year-over-year,
at the top-end of our previous 40-50% guidance range. As a result
of tight cost control and operational gearing we now expect
Payment's full-year adj. net income profitability above 60%. This
is an upgrade compared with the around 60% guidance we provided
earlier.
Marketplace Platform
GMV up 50%, revenue up 40% & adj. net income up 33%
Our Marketplace Platform connects both online and offline
merchants with consumers, enabling merchants to increase their
sales using an omnichannel strategy and consumers to buy a broad
selection of products and services, at the best possible prices
from a wide range of merchants. In particular, Kaspi Marketplace
champions domestic Kazakh brands and merchants.
m-Commerce is our mobile solution for shopping in person, while
consumers can use e- Commerce to shop anywhere, any time with free
delivery. Kaspi Travel allows consumers to digitally book domestic
and international flights and domestic rail tickets. Together we
offer a unified shopping experience, irrespective of online or
offline, making us relevant across practically all areas of
consumer spending.
Just as with our Payments Platform, the rapid expansion of our
Marketplace merchant base is now an important area of our
attention. We're focused on digitally onboarding Kaspi Pay
merchants to Marketplace and during the second quarter of 2022,
Marketplace merchants increased to 198K, equivalent to 243%
year-over- year growth. Over the same period, Marketplace consumers
increased 42% year-over-year to 5.4 million.
We expect merchant growth to remain at high levels throughout
2022, with more merchants and enhanced shopping categories leading
to ongoing fast growth in consumers and transactions per consumer.
An enlarged merchant base will contribute to rapid growth from
earlier-stage products like Kaspi Delivery and Kaspi Marketing over
the medium-term.
Throughout the first half of 2022 we took reduced Marketplace
promotional campaigns due to the negative backdrop. We also
prioritised adding new lower ticket shopping categories. This
positively impacted number of purchases but negatively impacted GMV
growth, especially in e-Commerce which is higher ticket and
therefore more promo sensitive than m-Commerce. Despite these
factors, Marketplace GMV still increased 50% year-over-year to
KZT618 billion in the second quarter of 2022. For the first half of
2022, Marketplace GMV increased 50% year-over-year to KZT1,045
billion.
m-Commerce had an excellent second quarter and first half 2022
with 53% and 58% year-over- year GMV growth respectively.
m-Commerce GMV was KZT350 billion and KZT599 billion during the
second quarter and first half 2022.
e-Commerce demand was strong with orders up 103% year-over-year
in the second quarter of 2022. GMV increased 23% year-over-year to
KZT205 billion during the same period, accelerating from 14%
year-over-year growth in the first quarter. GMV growth below order
growth, reflects expansion in the breadth and depth of everyday
items, at lower price points. For the remainder of 2022, we expect
items sold to continue growing faster than GMV. However, as new
categories grow in share, faster GMV growth will follow and with
Juma planned to take place twice in the second half of the year, we
expect e-Commerce GMV growth to continue accelerating. In the first
half of 2022, e-Commerce orders and GMV increased by 89% and 19%
year-over-year respectively. e-Commerce GMV reached KZT347 billion
during the first half of 2022.
Kaspi Travel's GMV increased 3.9x year-over-year to KZT63
billion during the second quarter of 2022, with ticket sales up
6.1x to 3.1 million. Travel's GMV reached 10% of Marketplace GMV,
which is impressive scale in less than two years. For the first
half of the year, Travel's GMV increased 328% year-over-year to
KZT99 billion.
The expansion of Kaspi Smart Logistics Platform to more cities
and introduction of free delivery for consumers is helping us grow
our e-Commerce merchant and consumer base. In the second quarter of
2022, orders delivered increased 142% year-over-year. Delivery now
accounts for 91% of orders, was free for the consumer for 96% of
orders, with 53% of orders delivered within 48 hours.
During the third quarter of 2021, we started to roll out Kaspi
Postomat and had already added 1,684 lockers by the end of June.
These lockers are now installed in 20 cities across the country and
accounted for 12.4% of e-Commerce deliveries. We use Kaspi.kz's
proprietary big data to identify the most appropriate locations and
consumer feedback is positive. By the end of 2022, we plan to have
around 3,000 Postomats, which should give us Kazakhstan's largest
locker and last mile delivery network.
At scale, the addition of Kaspi Postomat to the Kaspi Smart
Logistics Platform significantly enhances its value proposition for
consumers, merchants and delivery partners. We're very happy with
our investment in free delivery, which is giving our consumers a
superior shopping experience, helps local merchants to sell
nationwide and differentiates Kaspi e-Commerce vs other digital
shopping platforms.
Marketplace take-rate declined to 7.7% from 8.3% in the second
quarter of 2021 and resulted in Marketplace revenue growth of 40%
year-over-year to KZT48,380 million. For the first half of 2022,
Marketplace take-rate declined to 7.6% from 8.2% in the first half
of 2021, with 1H22 Marketplace revenue growing 40% year-over-year
to KZT81,054 million. The majority of the decline in year-over-year
take-rate reflects the blended contribution from Kaspi Travel which
is GMV growth enhancing but take-rate dilutive.
We are now disclosing m-Commerce and e-Commerce take-rate
separately. During the second quarter of 2022, m-Commerce and
e-Commerce take-rates were 7.7% and 9.0% respectively. Reduced
promotional activity contributed to lower take rate but as
mentioned previously promotional activity is now increasing. Lower
underlying e-Commerce take-rate year-over-year also reflects growth
in supermarkets GMV which is a substantial revenue opportunity but
take-rate dilutive. The inclusion of Kaspi Travel reduces reported
Marketplace take-rate, although Travel's take-rate increased to
3.8% from 2.9% in the second quarter of 2021, due to the growing
share of higher take-rate rail bookings.
During the second quarter of 2022, Marketplace Platform adj. net
income reached KZT30,596 million, representing a 33% increase
year-over-year. Net income profitability was 63.2% from 67% in the
same period in 2021, due to investment in free delivery. For the
first half of 2022, Marketplace adj. net income increased 35%
year-over-year to KZT50,677 million, with profitability of 62.5%
from 65% in the first half of 2022.
In 2021 we started testing e-Grocery, in partnership with
Magnum, Kazakhstan's largest food retail chain. Kazakhstan's
grocery market was valued at $12 billion in 2021, making it the
largest possible spending opportunity Marketplace can address.
Under this partnership Magnum is responsible for operating dark
stores, purchasing SKUs (currently 33K) and same day, free delivery
to consumers. Our main role is to generate orders and sales, define
assortment and pricing. We also provide integrated payments via
Kaspi Pay and use Kaspi Marketing to run highly personalised
advertising campaigns.
We started pilot testing e-Grocery last year and within month's
volumes scaled so fast that we quickly became Kazakhstan's N1
e-Grocer, albeit in a nascent market. In the second quarter of
2022, 88K consumers made 265K orders. Average ticket size was
around $25. Going forward, scaling e-Grocery is now one of our most
important priorities and although average ticket-size and take-rate
are lower than our e-Commerce average, we would expect a strong
e-Grocery proposition to be materially additive to engagement and
Marketplace mid-term growth.
The breadth and depth of our merchant proposition is one of the
most important drivers of transactions per consumer growth and our
long-term competitive advantage. In this regard, we expect to
continue merchant onboarding at high levels. We expect to see
continued strong growth from Kaspi Travel as consumer adoption
increases, new products are added and demand for international
travel recovers. We also expect rapid growth of e-Grocery and on
the back of our enhanced merchant offering, Kaspi Smart Logistics
will continue to scale.
Marketing activity is now normalising and in the second half of
2022 we expect to see accelerating Marketplace GMV growth. We now
expect Marketplace Platform to deliver 2022 GMV growth of around
55% year-over-year, an upgrade from our previous around 50%
guidance. We will continue to invest in free consumer delivery but
given the growing scale of the business this will have less of an
impact on Marketplace profitability in the second half of the year
and for full year 2022 we continue to expect a Marketplace net
income margin in the mid-60% region.
Fintech Platform
TFV up 17% YoY, Buy-Now-Pay-Later 47% of origination & 2.2%
CoR
The short-term nature of all our financing and more specifically
Buy-Now-Pay- Later (BNPL) products allow us to quickly ramp-up or
scale back origination as we observe changes in the consumer
environment. During the second quarter of 2022, Total Finance Value
(TFV) increased 17% year-over-year to KZT1,166 billion. More modest
growth reflects our deliberate decision to take a more cautious
approach to origination. We have now reaccelerated TFV growth and
are planning for business-as-usual approval levels in the second
half of the year. For the first half of 2022, TFV increased 19%
year-over-year to KZT2,038 billion.
Our average net loan portfolio increased by 50% year-over-year,
to reach KZT2.4 trillion during the second quarter of 2022. Total
deposits increased by 20% year-over-year to KZT2.9 trillion,
leading our loan to deposit ratio to increase to 80% from 69% in
the second quarter of 2022 but fall from 88% in the first quarter
of 2022. We view our current loan to deposit ratio as broadly
optimal. For the first half of 2022, our average net loan portfolio
increased by 58% year-over-year and total deposits increased by
23%.
Portfolio conversion of 2.0x in the second quarter of 2022, in
line with the same period in 2021, reflects ongoing higher early
repayments levels, as healthy consumers borrow, transact and repay
regularly. With consumer credit quality remaining extremely high,
we expect to continue benefiting from rapid portfolio conversion
throughout 2022. However, Juma will lead to a slightly higher avg.
ticket size and longer maturity. With the event planned to take
place twice in the second half of this year, we now expect 2022
portfolio conversion to be around 2x instead of the above 2x we
previously guided for.
Low risk, small ticket, short duration Buy-Now-Pay-Later (BNPL)
loans accounted for 47% of TFV in the second quarter of 2022,
making them our most important Fintech Platform product. Our
Merchant and Micro Business Finance products continue to see good
traction.
Fintech yield was 27.3% and 27.1% during the second quarter and
first half of 2022, reflecting the growing share of BNPL and
Merchant Finance loans. Juma leads to a higher share of lower
yielding BNPL loans and we continue to expect our full year 2022
yield to be around 25%.
During the second quarter and first half of 2022, our underlying
credit cost of risk was 2.2% and 1.9% respectively. Low credit cost
of risk reflects the low-risk nature of our products, especially
BNPL, ongoing improvements in our data driven origination
capabilities, as well as our efforts to constantly improve the
efficiency of our collection processes. As near-term macro
assumptions are amortised in the second half of 2022, we continue
to expect our full year reported credit cost of risk to be around
2%.
Consumer credit performance is always in focus for investors
when the economic situation appears to worsen. To expand on why our
credit quality remains high, it is important to remember that with
Kaspi.kz BNPL, our consumers do not maintain a continually
revolving line of credit, that was approved in a different economic
climate. Instead each transaction is a separate borrowing event,
that allows us to check using our proprietary technology and data
that our consumers are not overextending themselves. In addition,
because our average loan term is short, just over 6 months, in the
event of a downturn are older loans are quickly paid off.
Fintech Platform revenue increased by 32% year-over-year,
reaching KZT172,050 million during the second quarter of 2022. As a
result of both lower Fintech origination and a higher shower of
lower yielding BNPL in the first half of 2022, Fintech revenue
growth will moderate in the second half of the year, although this
should prove short lived, given that we have started to accelerate
TFV growth again. For the first half of 2022, Fintech Platform
revenue increased by 37% year-over-year, reaching KZT342,533
million.
In the second quarter of 2022, Fintech Platform's adj. net
income increased by 15% year-over-year to reach net income of
KZT56,922 million. Adj. net income margin of 33.1% compares with
38% in the second quarter of 2021. Declining profitability mainly
resulted from higher year-over-year funding costs. For the first
half of 2022, Fintech Platform adj. net income increased by 26%
year-over-year, reaching KZT114,516 million, with adj.net income
margin of 33.4% compared with 36.4% in the same period in 2021.
We expect TFV origination to accelerate and approvals to
normalise in the second half of the year but given our cautious
approach in the first half, full-year 2022 TFV growth is now
expected to be around 25% year-over-year, which is lower than our
previous 30-40% guidance. Although we will continue to prioritise
our BNPL product, we also expect Kaspi Business merchant financing
and SME products to continue scaling rapidly. BNPL integrated with
Kaspi Travel is also expected to see strong growth.
In 2022 our Fintech Platform should see solid top-line growth,
even considering more modest origination and some yield reduction.
With ongoing low cost of risk and tight cost control, we expect
another year of healthy profitability growth, even taking
increasing deposit interest rate costs into account. We continue to
expect our 2022 Fintech net income margin guidance to be around
low-30%, which is consistent with our guidance throughout this
year.
Guidance for full-year 2022
During March we deliberately scaled back credit origination
(TFV) and postponed promotional campaigns for our Marketplace
Platform. However, the underlying drivers of Kaspi.kz's business,
including consumer and merchant trends remain strong. We also
continue to see high levels of credit quality. As a result, we're
now scaling up credit origination and in July hosted our biggest
Juma ever. We plan to repeat Juma, in the final quarter of this
year.
Taking this into account, we are now upgrading our RTPV and GMV
growth guidance for 2022 and this more than offsets lower TFV
growth guidance. In addition, we now expect Kaspi.kz's consolidated
adj. net income to grow by 27-30% year-over-year in 2022, which is
at the top end of our previous 20-30% guidance.
GDR buyback program
Since the launch of our GDR buyback program we have spent around
$51 million and repurchased 998,429 GDR's. This is equivalent to
0.52% of GDR's outstanding prior to the buyback. Total GDR's
outstanding as 30 June 2022 were 191,958,533. Total GDR's
outstanding as 22 July 2022 were 191,684,203.
Conference call information
On Monday 25 July 2022 the management of Kaspi.kz will hold a
conference call and webcast at 1.00pm (London) (8.00am U.S. Eastern
Time, 6.00pm Nur-Sultan time) to review and discuss the company's
results for the second quarter and first half 2022.
Second Quarter and First Half 2022 Financial Results Conference
Call
To pre-register for this call, please go to the following
link:
https://ige.netroadshow.com/registration/client/11278/kaspikz's-2q22-financial-results-conference-call/
You will receive your access details via email.
Kaspi.kz Consolidated Financial Statements
About Kaspi.kz
Kaspi.kz's mission is to improve people's lives by developing
innovative mobile products and services. At our core is the
Kaspi.kz Super App, the leading mobile app in Kazakhstan.
The Kaspi.kz Super App serves as a single gateway to our
Payments, Marketplace and Fintech Platforms and is an integral part
of our users' daily lives. As people's lives become increasingly
digitalised, Super App usage is expected to grow supported by
accelerating adoption of cashless payments, e-Commerce and digital
financial services.
Kaspi.kz Super App business model ensures the growth and
development of one service contributes to the growth and
development of other services, creating a powerful virtuous cycle.
Increasing usage of a growing number of services puts Kaspi.kz in a
strong position to keep innovating, delighting our users and
fulfilling our mission.
Kaspi.kz has been listed on the London Stock Exchange since
2020.
For further information david.ferguson@kaspi.kz +44 7427 751
275
Forward-looking statements
Some of the information in this announcement may contain
projections or other forward- looking statements regarding future
events or the future financial performance of Kaspi.kz. You can
identify forward looking statements by terms such as "expect",
"believe", "anticipate", "estimate", "intend", "will", "could,"
"may" or "might", the negative of such terms or other similar
expressions. Kaspi.kz wish to caution you that these statements are
only predictions and that actual events or results may differ
materially. Kaspi.kz does not intend to update these statements to
reflect events and circumstances occurring after the date hereof or
to reflect the occurrence of unanticipated events. Many factors
could cause the actual results to differ materially from those
contained in projections or forward-looking statements of Kaspi.kz,
including, among others, general economic conditions, the
competitive environment, risks associated with operating in
Kazakhstan, rapid technological and market change in the industries
the Company operates in, as well as many other risks specifically
related to Kaspi.kz and its respective operations.
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END
IR KZGZNKKNGZZG
(END) Dow Jones Newswires
July 25, 2022 02:08 ET (06:08 GMT)
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