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Dubai-based mass transit app Swvl has turned profitable in 2023, recording a net income of USD 3.1 mn, bouncing back from the USD 123.6 mn in net loss in 2022, the Nasdaq-listed company said in its earnings release (pdf). Revenues fell 48% y-o-y to USD 22.8 mn, driven by a 54% y-o-y drop in B2C operations as the company shifted its focus on more profitable segments. B2B operations contributed USD 16.64 mn, falling 56% y-o-y from 2022.
Swvl attributed its turnaround to focusing on “financial stability and operational efficiency, and the effective implementation of profitability strategies during the fiscal year.”
Egypt’s FX challenges are to blame for the revenue drop: The Cairo-born company attributed the modest B2B revenue primarily to “the change in EGP to USD rates, given that the Egyptian market during FY2023 contributed to approximately 90% of the total group revenues, and the EGP depreciated in value by 25% y-o-y,” according to the company’s financial statements. Swvl also said it had terminated contracts that failed to meet its minimum income requirements, resulting in an overall lower sales value.
Swvl slashed its cashflow deficit: The company’s negative cashflow fell to USD 9.1 mn in 2023, down from USD 117 mn in 2022. Swvl was able to shrink the deficit by funding its operations through improving “working capital cycles, and most recently from the disposition of certain assets while in 2022 the financing was dependent on equity financing,” Swvl said in its financial statements.
What they said: “As we advance, our commitment to innovation will be marked by the launch of a wide range of products slated for the upcoming year and for our new potential markets. Additionally, in the meantime, we are expanding our strategic partnerships into more GCC countries. Our focus today remains towards improving profitability while resuming our high paced growth,” Swvl CEO Mostafa Kandil said.
The company plans to grow its SaaS operations: “We intend to expand our Swvl Business offerings with SaaS in 2024 and 2025. Our SaaS offerings will be targeted at corporate customers (as well as schools and municipalities) that operate their own vehicle fleets, with specific services tailored to the needs of each customer,” the company said.
Background- Swvl was hit with two delisting warnings from Nasdaq last year after the market value of its listed securities dipped below the benchmark USD 50 mn, with its share price falling below the USD 1.00 mark for several months — collapsed by more than 98% after its IPO in April 2022. This was mainly due to market volatility, as well as rising expenses and costs associated with the listing. The company exited several markets by selling off a number of its subsidiaries and laying off 50% of its global workforce as part of its portfolio optimization strategy. Its shares are now up 615% YTD, ending yesterday at USD 11.45.
