Kazakhstan’s leading alternative digital lending provider1 and one of IDF Eurasia’s entities, LLP OnlineKazFinance, has published its unaudited results for the 9 months (9m) of 2020:
- – Revenue is up 150% to KZT 10.8 billion (€ 23.6 million) compared to KZT 4.3 billion (€ 10.1 million) for 9m 2019.
- – EBITDA (earnings before interest, taxes, depreciation, and amortization) doubled during 9m 2020 and reached KZT 5.3 billion (€ 11.5 million), 9m 2019: KZT 2.6 billion (€ 6.2 million).
- – With foreign exchange hedging in place, net income hit KZT 2.2 billion (€ 4.9 million) in 9m 2020, up 64% from last year.
- – Net loan portfolio reached KZT 35.8 billion (€ 71.7 million) in September 2020 – two times higher than year-ending 2019 level.
- – Annualized ROAE (return on average equity) topped 36% – the highest in the company’s history, while equity/assets ratio being 29%.
Boris Batine, the Founder of IDF Eurasia, commented:
“In Q3 2020, we continued to drive top-line and bottom-line simultaneously with quarterly revenues first-time-ever hitting € 10 million while quarterly profits topped € 2.3 million. With operational efficiency increased significantly in 2020, we became particularly focused on diversification of financing sources and foreign exchange risk management. After finding the right tools to stabilize operations in the first part of the year and cover the pending payments to investors on Mintos, today, I’m happy to say that we succeeded – we have covered what was due to investors on Mintos and we have successfully issued KZT and USD-denominated bonds for the equivalent of € 17 million in August-September. As a responsible business, OnlineKazFinance continues to set the tone for the whole non-banking financial industry in Kazakhstan – together with local government, we have recently introduced a series of first-in-Kazakhstan free-of-charge training on financial literacy across several cities. We believe that financial inclusion should be backed by improving awareness and financial literacy to achieve a secure future and a better standard of living for local communities.”
Financial Highlights
Revenue: The company’s revenue rose 150% to KZT 10.8 billion (€ 23.6 million) in the first 9 months of 2020 compared to the relevant period the year before. Business scaling continued in Q3 with a robust NPL (non-performing loan) control. Flexible yet conservative risk management policy and the right product-market-fit allowed to double our portfolio in 2020 while the overall market rose 38% in 9m 2020.
Net income: Net income of KZT 2.2 billion (€ 4.9 million) for the first 9 months of 2020 compared to KZT 1.37 billion (€ 3.2 million) the year before had already surpassed the income of KZT 1.43 billion (€ 3.3 million) for the full year of 2019, representing material growth of the business.
Liquidity and Capital Resources
Following the debut bonds issue, the lending company reports that it has achieved higher diversification of funding sources and a lower average interest rate – this will be a foundation for higher margins in future periods. Throughout the first 9 months of 2020, the interest expense margin was 12% reflecting our approach to match the loan portfolio increase with financing at a constant rate. Conservative debt-to-equity structure with equity reaching 29% of the total assets in September 2020 provides more stability on the market amidst COVID-19 development.
Strategic outlook
As a market leader in the segment in Kazakhstan1, the lending company reports it strategically focused on two major sub-sectors: microloans to SME (small and medium enterprise) and personal installment loans, where the company sees untapped growth potential. IDF Eurasia’s funding strategy continues to focus on further diversification with a series of public debt placements in Kazakhstan in the pipeline.
About IDF Eurasia
OnlineKazFinance LLP is part of IDF Eurasia group, the largest online lending service in Russia and Kazakhstan, operating in these countries under the Moneyman and Solva brands. The company combines the use of advanced developments in decision-making with the principles of responsible lending.
