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01/11 04:45
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary highlights several negative factors, including high interest rates, macroeconomic uncertainties, and a new government tax, all impacting profitability. Despite revenue growth, the lack of a share buyback program and increased risks, such as the higher cost of risk and loan-to-deposit ratio, add to the negative outlook. The Q&A further emphasizes macro uncertainties and unclear management responses. These factors, combined with no strategic plan update, suggest a likely negative stock price movement in the short term.
Revenue Revenue increased to TRY834 billion, up 21% year-over-year.
Net Income Net income was TRY254 billion, up 16% year-over-year.
Payments Revenue Growth Payments revenue grew by 16% year-over-year.
Marketplace Revenue Growth Marketplace revenue grew by 33% year-over-year.
Fintech Revenue Growth Fintech revenue grew by 18% year-over-year.
e-Grocery GMV Growth e-Grocery GMV increased by 64% year-over-year.
e-Grocery Purchases Growth e-Grocery purchases increased by 66% year-over-year.
Cost of Risk Cost of risk increased to 0.6% from 0.5% due to macro provisioning.
Loan to Deposit Ratio Loan to deposit ratio is high, indicating a shift in focus towards growing the deposit base.
NPL Ratio NPL ratio increased, which is normal Q1 seasonality.
Take Rate (Payments) Take rate decreased to 1.13% due to a mix change.
Take Rate (Marketplace) Take rate increased, contributing to faster revenue growth.
Take Rate (e-commerce) e-commerce take rate increased to 12.5%.
Take Rate (m-commerce) m-commerce take rate increased by 20 bps.
Take Rate (Kaspi Travel) Kaspi Travel take rate increased to 5.3% from 4.5%.
Euro Bond Issuance Raised $650 million in euro bonds at 6.250%, due in 2030.
Deposit Growth Deposits grew to 379 billion Tenge with 84,000 consumers.
e-Grocery Growth: e-Grocery GMV increased by 64% year-over-year with purchases up 66%.
New Deposit Products: Launched new term deposits with interest rates up to 18%, attracting 84,000 consumers and 379 billion Tenge.
Euro Bond Issuance: Raised $650 million in euro bonds at 6.250% due in 2030.
Acquisition of Rabobank: Signed agreement to acquire Rabobank, a fully licensed bank in Turkey, with an investment of $300 million planned.
Market Expansion in e-Grocery: Plans to enter two additional cities for e-Grocery operations.
Impact of Smartphone Registration: New registration requirements for smartphones in Kazakhstan temporarily reduced demand.
Payments Platform Growth: Payments volume grew 17% year-on-year, with TPV growth at 23%.
Marketplace Performance: Marketplace GMV grew 20% year-on-year, with e-commerce GMV up 23%.
Fintech Growth: TFV origination grew 18%, primarily driven by merchant side.
Interest Rate Strategy: Introduced higher interest deposit products to leverage high interest rate environment.
Cost Management: Maintained tight cost control leading to 21% bottom line growth despite revenue growth of 16%.
Smartphone Registration Requirements: The introduction of smartphone registration requirements in Kazakhstan has led to a significant temporary impact on demand for smartphones, which is a key category in e-commerce, accounting for around 18% of GMV. This regulation resulted in a sharp increase in prices and a fall-off in demand, knocking approximately seven percentage points off growth.
High Interest Rate Environment: The company is operating in a continuous high interest rate environment, which is expected to persist throughout the year. This situation increases funding costs and impacts profitability, as the cost of deposits has risen substantially.
Macroeconomic Uncertainty: There is a potential impact from broader macroeconomic uncertainty, particularly affecting higher ticket size discretionary transactions, such as consumer electronics and cars. This uncertainty could disproportionately affect GMV without significantly impacting the bottom line.
Government Tax on Revenue: The Kazakh government is expected to introduce a 10% tax on revenue from investments, primarily affecting interest revenue for the whole of 2025. This could reduce net income by approximately 200 basis points.
Increased National Bank Reserves: The anticipated increase in National Bank reserves by the government could further impact the company's financials, although the specifics are yet to be confirmed.
e-Grocery Growth: e-Grocery is one of the fastest growing businesses in e-commerce, with active consumers reaching almost 1 million and GMV up 64% year-over-year.
New Deposit Products: Launched new term deposits with higher interest rates, successfully attracting 84,000 consumers and 379 billion Tenge in deposits.
Euro Bond Issuance: Raised $650 million in euro bonds at 6.250% due in 2030 to support international expansion and investments in Turkey.
Acquisition of Rabobank: Signed an agreement to acquire Rabobank, a fully licensed bank, to develop fintech products in Turkey with an initial investment of $300 million.
GMV Growth Outlook: GMV growth is now expected to be 15% to 20%, down from 25% to 30%, due to new smartphone import regulations.
TPV Growth Outlook: TPV growth outlook remains unchanged, with TFV growth expected at around 15%.
Impact of Interest Rates: Higher interest rates are expected to be a drag on earnings in the near term but may turn into a tailwind over the medium term.
Tax on Investment Revenue: Expected introduction of a 10% tax on revenue from investments, which could impact net income by approximately 200 bps.
Share Buyback Program: None
The company shows strong growth in key areas like e-Grocery, advertising, and fintech, despite smartphone supply issues. The strategic expansion in Kazakhstan and Turkey, along with plans to resume shareholder returns, are positive indicators. While management avoided specifics on dividends and smartphone supply normalization, the overall sentiment is optimistic, especially with strong performance in non-smartphone segments and advertising growth.
The earnings call presents a mixed picture: strong deposit growth and positive GMV and EBITDA growth, but challenges from high interest rates and a reduced GMV growth outlook. The Q&A reveals underpenetrated opportunities in Kazakhstan, but concerns about funding costs and unclear guidance on smartphone market recovery and capital deployment. These factors balance out to a neutral sentiment.
The earnings call summary highlights several negative factors, including high interest rates, macroeconomic uncertainties, and a new government tax, all impacting profitability. Despite revenue growth, the lack of a share buyback program and increased risks, such as the higher cost of risk and loan-to-deposit ratio, add to the negative outlook. The Q&A further emphasizes macro uncertainties and unclear management responses. These factors, combined with no strategic plan update, suggest a likely negative stock price movement in the short term.
The earnings call presents a mixed picture: strong financial performance with revenue and net income growth, but challenges like regulatory risks, market competition, and operational challenges from the Hepsiburada acquisition. The Q&A reveals management's reluctance to provide concrete financial targets, adding uncertainty. Despite a positive dividend announcement, the lack of a share buyback program and potential integration issues balance out the positives. Overall, the sentiment is neutral due to the blend of strong financials and significant risks.
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