REG - JSC Kaspi.kz - Kaspi.kz 3Q & 9M 2023 Financial Results

Kaspi.kz AOAnnouncement

23/10/2023 07:15

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RNS Number : 9419Q  JSC Kaspi.kz  23 October 2023

 

Kaspi.kz 3Q & 9M 2023 Financial Results

Almaty, Kazakhstan, 23 October 2023 - JSC Kaspi.kz ("Kaspi.kz", "we", or the
"Company") which operates the Kaspi.kz Super App for consumers and Kaspi Pay
Super App for merchants, today publishes its unaudited consolidated IFRS
financial results for the quarter and first nine months ended 30 September
2023.

3(rd) quarter 2023 highlights

·    Kaspi.kz 3(rd) quarter consolidated revenue and net income growth
ahead of our expectations. Revenue up 51% and 53% YoY for the 3(rd) quarter
and 9 months 2023, respectively. Net income up 40% and 50% YoY for the 3(rd)
quarter and 9 months 2023, respectively

·    Our faster growing and more profitable Payments and Marketplace
Platforms continued to deliver strong bottom-line growth, accounting for 63%
of net income during the first nine months of 2023. We expect Payments and
Marketplace Platforms to continue growing at a faster rate than our Fintech
Platform.

·    Kaspi.kz Super App daily engagement of 65% is amongst the highest of
selected major apps globally. With a large and engaged consumer and merchant
base, our focus remains on transaction intensity:

o Average monthly transactions per active consumer reached a record high 68

o TPV transactions up 34% & GMV purchases up 31% YoY

·    All Platforms outperformed, led by Marketplace GMV and revenue up 50%
and 85% YoY respectively:

o GMV of Kaspi Juma in July up 82% YoY

o Next Juma scheduled for November and we are planning for it to be bigger and
better than ever before

·    Within Marketplace, e-Commerce delivered the stand-out performance,
with accelerating GMV growth and even faster revenue growth:

o e-Commerce GMV growth accelerated to 56% YoY

o Take rate up 120bps YoY due to early-stage monetization of Kaspi Delivery
and Kaspi Advertising

o 5,223 Kaspi Postomats operational in September 2023, up 73% YoY, accounting
for 37% of orders delivered for 9 months 2023. On track for around 6,000 Kaspi
Postomats by end-2023

o Acquisition of 40% stake in Kazakhstan's leading classifieds business,
Kolesa Group completed. Expected to be additive to Marketplace future growth

·    e-Grocery momentum very strong:

o e-Grocery GMV up 3.4x, purchases up 3.4x and number of consumers up 3.4x YoY

o Meaningful scale already achieved, equivalent to 4% and 12% of total
e-Commerce (1P+3P) GMV and purchases

o Remain focused on Almaty & Astana. Regional expansion still to come

o Plan to invest around KZT20-25 billion per annum over 3 years on track

·    Kaspi B2B Payments continues to prove itself as a transformative
payments proposition for merchants and their suppliers:

o B2B TPV up 2.3x YoY for 9 months 2023

o B2B Payments now 4% of our Payments Platform's total TPV and expected to
remain additive to growth

o Payments Platform net income profitability at all time high levels

·    Fintech Platform remains focused on growth in consumer deposits and
SME lending:

o Average savings balances up 42% YoY

o SME financing our fastest growing lending product, accounting for 15% of TFV
in 9 months 2023

·    Based on strong 3(rd) quarter 2023 Kaspi.kz consolidated financials:

o Board of Directors proposes a dividend of KZT850/GDR, subject to shareholder
approval

o New $100 million GDR repurchase program to be launched

o $248 million GDRs repurchased since April 2022

·    In light of the SEC registration process, announced on October 19,
2023, we are not providing guidance in this release.  We intend to return to
our customary practice when permissible and appropriate.

To the shareholders of Kaspi.kz:

Following a successful first half 2023, I'm pleased to report that Kaspi.kz
had a strong third quarter. Led by Marketplace and especially e-Commerce,
results were better than expected across all our platforms. When we talk about
outperformance at Kaspi.kz, we don't just mean top-line. Third quarter 2023
net income growth of 40% year-over-year, is an excellent result. Given
investments in e-Commerce delivery, e-Grocery and headwinds from high interest
rates our bottom-line performance demonstrates that we can deliver profitable
growth today, as well as take the steps to ensure we keep growing fast well
into the future.

Our focus and N1 priority are to grow transactions between consumers and
merchants. You can see that we're delivering, with monthly transactions per
consumers hitting a record high 68 in the quarter. Our consumers transact
using the Kaspi.kz Super App more than 2 times per day on average and daily
usage of our Super App remains amongst the highest of selected major apps
globally.

With a large and engaged consumer and merchant base, higher transaction
intensity is a function of having a broad and growing suite of top-quality,
highly relevant products and services. In the third quarter, e-Commerce stands
out, with GMV growth accelerating to 56% year-on-year. Our efforts to
differentiate our consumer and merchant proposition, including significantly
expanding SKUs and making delivery easier with Kaspi Postomats, are paying
off. The e-Commerce market in Kazakhstan only accounted for 8% of retail
spending in 2022 and as the market leader, we think Kaspi e-Commerce is in
pole position to capture the substantial growth opportunity ahead.

Looking at some of our earlier stage initiatives, e-Grocery keeps going from
strength to strength. e-Grocery transactions increased 3.4x year-over-year to
around 1.4 million during the quarter. This is really good progress and the
result of our efforts to design a truly differentiated grocery offering.
Consumer feedback is extremely positive and although we still have a lot to
do, we're increasingly happy with the operating and financial model we have
built. Expansion beyond Almaty and Astana will help sustain fast growth over
the medium-term.

Completion of the acquisition of Kolesa opens up another large, untapped
addressable market, that's ripe for digitalisation. Just to give you one
example, we are entering into the used car sales market by leveraging our
technology, car financing and payment tools, with the aim of becoming a
leading player. There are many more classifieds products we can design across
the services sector of the economy, which in itself is underpenetrated in
Kazakhstan. We're fully committed to quickly showing Kaspi.kz shareholders the
benefits that will arise from the acquisition of Kolesa and I think you will
be pleased with what you see in 2024.

Turning to other matters, our long-term approach to capital allocation remains
unchanged. Investing in our growth, be it organic or via M&A, is always
the first use for the cash we generate. However, if we have excess capital, we
will return it to our shareholders. The numbers speak for themselves, as we
approach a near 3-year track record of returning substantial amounts of
capital. Following the third quarter of 2023, our Board of Directors has
recommended dividend of KZT850/GDR, which is subject to shareholder approval.
Having repurchased $248 million GDRs since April 2022, we are launching a new
up to $100 million buyback program.

The final quarter of the year has gotten off to a strong start. Juma, which
exceeded all our expectations in July, will take place again in November and
we're aiming for it to be bigger and better than previously. More generally we
observe a healthy and predictable consumer and merchant environment.

To wrap up, once again, we are a profitable, dividend paying and fast-growing
technology company, which buys back its own stock and makes high quality,
accretive acquisitions to ensure our long-term growth, and these qualities set
us up apart from many leading technology companies around the world.

We have proven that our unique two-sided Super Apps business model, the
Kaspi.kz Super App for consumers and the Kaspi Pay Super App for merchants,
delivers results. With the multi-year structural growth opportunity offered by
digitalisation in Kazakhstan and the neighbouring region amongst the most
attractive globally, we thoroughly intend to capture it.

As always, I would like to thank each and every Kapsi.kz employee for their
incredible execution and dedication to our consumers, merchants and partners.
To our long-term shareholders, thank you for your ongoing trust and support.
 
 

Mikheil
Lomtadze
 

Kaspi.kz CEO and co-founder

Kaspi.kz 3rd quarter 2023 Engagement Highlights
 

68 transactions per consumer/month, amongst the highest DAU/MAU globally

The Kaspi.kz and Kaspi Pay Super Apps for consumers and merchants give our
Payments, Marketplace and Fintech Platforms strong competitive advantages.
During the third quarter of 2023, Super App transaction levels once again hit
all-time highs.

To drive number of transactions higher, over the last three years we have
prioritised onboarding as many merchants, as rapidly as possible. In 2023,
growth in the number of new merchants is still robust, but our focus is on
growing the number of transactions between consumers and merchants.

We expect that increased adoption of our existing products by consumers and
merchants, along with a growing range of new products will further stimulate
consumer purchases and support growth across our other platforms. Average
number of monthly transactions per active consumer, increased 18%
year-over-year to 68, during the third quarter of 2023. This contributed to
the Kaspi.kz Super App having amongst the highest levels of daily engagement,
of selected major apps globally.

For the first nine months of 2023, TPV transactions increased 41%
year-over-year and Total GMV purchases including e-Grocery increased 43%. Fast
growth in transactions illustrates just how relevant our products are to our
customers and merchants.

Kaspi Pay and m-Commerce are the basis of our day-to-day relationship with
merchants. Going forward, we intend to grow earlier stage merchant services
including e-Commerce, B2B Payments, Kaspi Advertising, Kaspi Delivery and
financing for merchants and SMEs. These products all help our merchants invest
in their business, reach new customers and increase their sales. We expect
they will be key to our ability to deliver fast top and bottom-line growth.
Growing adoption of Kaspi Delivery and Kaspi Advertising is already making a
difference to e-Commerce's take-rate. We believe the growth opportunity ahead
in these areas is substantial and as these initiatives gradually scale, we
will of course provide more detail.

P2P, Household Bill Payments, BNPL, Kaspi QR and GovTech are fundamental to
high day-to-day consumer engagement. Going forward, we aim to enable growth of
less mature services including e-Commerce & Kaspi Postomats, Kaspi
Travel's full range of products, e-Grocery and Kaspi Classifieds. These
services help our consumers discover the products they need, at competitive
prices, from local merchants, with free delivery options, therefore saving
consumers time and money. Products like e-Grocery and Kaspi Postomats have
made a dramatic difference to the lives of our consumers and with penetration
across our full range of Super App services still low, here too the
opportunity ahead remains significant.

From start-up in Almaty around two years ago, we continue growing Kaspi
e-Grocery. With an innovative, high-quality digital offering, we believe we
are transforming the food shopping experience in Kazakhstan. We believe as
e-Grocery scales, it will mean higher Super App engagement, faster Marketplace
growth and, given the size of the opportunity, value creation for our
shareholders.

During the third quarter of 2023, e-Grocery purchases increased 3.4x
year-over-year and the number of consumers was up 3.4x. We are increasingly
happy with our operating and financial model and with rapidly growing scale in
Almaty and Astana this is expected to lead to an improving financial profile.

We started to roll out Kaspi Postomats in late-2021 and had 5,223 lockers by
the end of September 2023, accounting for 37% of e-Commerce deliveries.
Postomats increase the share of successful 1(st) time deliveries, lower the
cost of last-mile-delivery and will help us enhance Marketplace's long-term
profitability. Postomats are also a key part of our plan to make commerce in
Kazakhstan more environmentally sustainable. With consumer feedback extremely
positive, we continue to plan for around 6,000 Postomats by the end of this
year.

Kaspi B2B Payments, which was born out of Bill Payments and P2P, is an example
of how we can grow the number of transactions by targeting new types of
customers, in this case wholesalers, distributors and manufacturers.

Number of B2B Payments transactions increased 2.1x year-over-year, during the
first nine months of 2023 and with this product still in its early days, we
expect B2B Payments to keep growing fast. In the medium- term, B2B Payments
can be the start of a long list of innovative B2B services.

As always, we expect to continue to launch new services and our product
pipeline in 2023 and beyond is as exciting as ever.

Kaspi.kz 3Q & 9M 2023 Financial
Highlights
 

Top & bottom-line growth ahead of
expectations
 

Revenue up 51% and net income up 40% YoY in 3Q23

During the third quarter of 2023, total revenue increased 51% year-over-year
to KZT508 billion ($1.1 billion). For the first nine months of 2023, total
revenue increased 53% to KZT1.3 trillion ($2.8 billion).

During the third quarter of 2023, net income increased 40% year-over-year to
KZT232 billion ($0.5 billion). For the first nine months of 2023, net income
increased 50% to KZT601 billion ($1.3 billion).

Our cash generation capacity remains as strong as ever. As a result, our Board
of Directors has proposed, subject to shareholder approval, a third quarter
2023 dividend of KZT850/GDR. In addition, we will commence a new GDR buyback
program of up to $100mn. Since April 2022 when we started GDR repurchases, we
have bought back GDRs equivalent to $248 million.

Our Payments Platform delivered fast and consistent top-line growth, due to
the ongoing success of Kaspi Pay and Kaspi B2B Payments. In Marketplace,
m-Commerce, Kaspi Travel and especially e-Commerce all contributed, helped by
July's record breaking Kaspi Juma. e-Grocery is additive to Marketplace
growth. Healthy TFV origination over the last 12 months, continued to
translate into strong Fintech revenue growth in the first nine months of 2023,
even with slightly lower yield year-over-year.

We continued to benefit from Payments Platform's operational gearing, with its
profitability at its highest level ever. Marketplace's profit growth is lower
due to investments in e-Grocery, which is a business that is expanding rapidly
but still in its early-stages. In Fintech, the combination of yield reduction
and significantly higher funding costs continue to mute profit growth. Higher
funding costs are, however, helping us to attract substantial deposit inflows,
with average Kaspi Deposit balances up 42% year-over-year in the third quarter
of 2023. We believe, an enlarged savings base will lead to more transactions
and allow us to fund higher TFV over the medium term. With the decline in
Fintech profitability cyclical, not structural, as interest rate normalisation
gathers pace, we expect Fintech profit growth to accelerate again.

Payments
Platform
 

Strong top-line & even faster bottom-line
 
 

TPV up 42%, revenue up 41% and net income up 47% YoY in 3Q23

Our Payments Platform facilitates transactions between and among merchants and
consumers. For consumers, Payments Platform is a highly convenient way to pay
for shopping transactions, regular household bills and make peer-to-peer
payments. For merchants, Payments Platform enables them to accept payments
online and in-store, issue and instantly settle invoices, pay suppliers and
monitor their turnover. Kaspi Shopping Register integrates a digital cash
register in the Kaspi Pay Super App with our POS network.

Our Payments Platform is our main customer acquisition tool and fundamental to
high levels of engagement. We continue adding new opportunities to spend and
pay, which is a function of new merchants and product development. Payments
Platform proprietary data informs decision making across multiple areas of our
business.

Having prioritised growth in Payments Platform merchants over the last three
years, our focus now is transaction intensity and during the third quarter of
2023, number of Payments Platform transactions increased 34% year-over-year.
As merchants shift more of their volumes to us, TPV which measures revenue
generating transactions, will keep growing at a fast rate.

With a large and diverse merchant base, consumer growth remained robust.
Payments Platform active consumers increased 15% year-over-year, reaching 12.6
million, in the first nine months of 2023.

During the third quarter of 2023, TPV increased 42% year-over-year to KZT7.7
trillion. Even with moderating inflation, TPV continues growing fast due to
growth in Kaspi Pay merchants and transactions, rapid adoption of B2B Payments
and the ongoing popularity of Bill Payments. For the first nine months of
2023, TPV increased 49% year-over-year to KZT20.2 trillion.

Over the last year, Kaspi B2B Payments has emerged as a fast-growing component
of our TPV. Our B2B Payments proposition connects small merchants with
wholesalers, distributors and manufacturers, allowing invoices to be settled
instantly and conveniently. During the first nine months of 2023, B2B Payments
TPV increased 2.3x year-over-year to KZT764 billion and accounted for 4% of
TPV. With B2B Payments still in its early days, we expect it to continue
growing significantly faster than Payments TPV.

Average balances on current accounts increased by 22% year-over-year in the
third quarter of 2023 to KZT771 billion, which is healthy and consistent with
trends observed in the second quarter.

During the third quarter of 2023, Payments Platform revenue increased 41%
year-over-year to reach KZT125 billion. Take-rate during the period was stable
at 1.2%. For the first nine months of 2023, Payments Platform revenue
increased 49% year-over-year to reach KZT339 billion.

Payments Platform net income increased 47% year-over-year to KZT82 billion,
during the third quarter of 2023. Record Payments Platform profitability
continues to reflect benefits resulting from the elimination of third-party
costs, our proprietary payments network's operational gearing and tight cost
control. For the first nine months of 2023, Payments Platform net income
increased 61% year-over-year to KZT220 billion.

As existing consumers incomes keep growing, we expect them to spend more with
us. We will also keep adding more opportunities to transact, across both the
retail goods and services sectors. In Kazakhstan, spending on services stands
out as an underpenetrated segment on consumer spending. Kaspi B2B Payments
increases our addressable market further. We will make every effort to stay
disciplined on costs, ensuring strong top-line trends, drop through to the
bottom-line and Payments Platforms inherent operational gearing remains
intact.

Marketplace Platform
 
 

Accelerating GMV growth; strong revenue growth & bottom-line growth
 

GMV up 50%, revenue up 85% and net income up 64% YoY in 3Q23

Our Marketplace Platform connects both online and offline merchants with
consumers, enabling merchants to increase their sales using an omnichannel
strategy and consumers to purchase a broad selection of products and services
from a wide range of merchants. Other than in e-Grocery, our Marketplace
Platform is a "3P" model.

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 book domestic and international flights, rail tickets and
overseas package holidays. e-Grocery helps households with their day-to-day
shopping needs and Kolesa now gives Marketplace leadership in classifieds. All
combined, we offer a unified digital shopping experience, irrespective of
online or offline, relevant across practically all areas of consumer spending.

Just as with our Payments Platform, the expansion of our Marketplace merchant
base has been an important focus. Now we're prioritising growth in
transactions and during the third quarter of 2023, Marketplace purchases
increased 31% year-over-year.

With the attractiveness of Marketplace's consumer proposition continuing to
increase, growth in consumers was strong, and for the first nine months of
2023, the number of Marketplace active consumers was up 20% year-over-year
reaching 6.9 million.

In the third quarter of 2023, Marketplace GMV momentum accelerated
significantly and was up 50% year-over-year to reach KZT1.2 trillion.  Higher
GMV momentum was in part due to the success of Kaspi Juma in July which
exceeded all our expectations. For the first nine months of 2023, GMV
increased 53% to KZT2.8 trillion. We will repeat Kaspi Juma in November.

The combination of changes in product mix, increased monetization of Kaspi
Delivery and Kaspi Advertising, resulted in Marketplace take-rate increasing
significantly to 9.1% from 8.4% in the third quarter of 2022. For the first
nine months of 2023, Marketplace take-rate increased to 8.8% from 7.9% in the
same period in 2022.

m-Commerce continues to deliver excellent results. During the third quarter of
2023 purchases increased 11% year-over-year. The combination of higher promo
activity including Juma and growth in retail trade led to strong ticket-size
growth year-over-year. As a result, GMV growth accelerated to 47% and reached
KZT687 billion. Higher promotional activity resulted in m-Commerce's take-rate
increasing to 8.8% from 8.3% over the same period. For the first nine months
of 2023, m-Commerce GMV increased 50% to KZT1.6 trillion.

In the third quarter of 2023, e-Commerce demand was extremely strong with
orders up 120% year- over-year. GMV growth accelerated to 56% year-over-year
to KZT416 billion. GMV growth below order growth, reflects the inclusion of
fast growing but lower ticket e-Grocery and our ongoing efforts to expand the
breadth and depth of everyday items at lower price points. During the quarter,
1P accounted for 4% and 12% of e-Commerce (1P+3P) GMV and purchases,
respectively, which is meaningful given such a short period.

For the first nine months of 2023, e-Commerce GMV increased 57% to KZT965
billion. For the first 9 months of 2023, 1P accounted for 4% and 11% of
e-Commerce GMV and purchases, respectively.

In the third quarter of 2023 e-Commerce's take-rate increased significantly to
10.8% from 9.6% as of the third quarter of 2022. The main drivers of this were
changes in product mix, especially due to the success of Kaspi Juma, increased
monetization of Kaspi Delivery and to a lesser extent revenue from Kaspi
Advertising. Kaspi Delivery and Kaspi Advertising are expected to remain
additive to e-Commerce take-rate.

Kaspi Travel's GMV increased 45% year-over-year to KZT99 billion during the
third quarter of 2023, with ticket sales up 35% to 3.8 million. Over the same
period, take-rate increased by 50bps year- over-year to 4.3%, due to the
growing share of higher take-rate rail bookings.

Travel's GMV accounted for 9% of Marketplace GMV for the first nine months of
2023. Travel's GMV growth should remain strong, with international package
holidays, which we expect will become more meaningful to GMV next year,
increasingly additive to growth. The addition of package holidays will also be
take- rate enhancing. For the first nine months of 2023, Travel's GMV
increased 57% to KZT263 billion.

With Marketplace take-rate up year-over-year and e-Grocery growing fast, third
quarter 2023 revenue grew significantly faster than GMV and was up 85%
year-over-year to KZT125 billion. Take rate will vary from quarter-to-quarter
due to the timing of promotional events but we believe that Kaspi Juma and the
increased monetization of Kaspi Delivery and Kaspi Advertising will all
contribute positively for the remainder of the year. For the first nine months
of 2023, Marketplace revenue increased 90% year-over-year to KZT284 billion.

During the third quarter of 2023, Marketplace Platform net income reached
KZT74 billion, representing a 64% increase year-over-year. Net income growth
below revenue growth, reflects investments in e-Grocery which is growing
rapidly but still in its early stages. For the first nine months of 2023,
Marketplace Platform net income increased 72% to KZT160 billion.

Looking into the medium-term, we expect enhanced shopping categories and
services to lead to more transactions per consumer and help us attract new
consumers. Having substantially grown our Marketplace merchant base over the
last two years, our focus is now on helping existing merchants sell more.

Accounting for around 8% of retail in 2022 in Kazakhstan, e-Commerce is
structurally underpenetrated but growing fast. m-Commerce will benefit as the
structurally underpenetrated services segment of the economy, which also
includes travel, grows faster than incomes.

Earlier-stage initiatives like Kaspi Advertising, Kaspi Delivery and SME
financing are playing their part in the digitalisation of spending and
combined with rapid growth from e-Grocery and classifieds we believe will
contribute to strong top and bottom-line growth from Marketplace Platform.

Fintech Platform
 
 

TFV origination growing fast YoY, healthy CoR trends & strong deposit base
growth

TFV up 41% & deposits up 42% YoY and low CoR in 3Q23

Our Fintech Platform provides consumers with BNPL, finance and savings
products, and merchants with merchant finance services.

During the third quarter and first nine months of 2023, TFV increased 41% and
52% year-over-year, to reach KZT2.2 trillion and KZT5.5 trillion respectively.
We finished the first nine months of 2023 with 6.0 million loan consumers, up
12% year-over-year, which is consistent with growth trends in recent quarters.

Low risk, small ticket, short duration Buy-Now-Pay-Later (BNPL) loans
accounted for 45% of TFV in the first nine months of 2023, making them our
most important Fintech Platform product. With Kaspi Juma taking place in
November, we expect the share of BNPL to step up again in the final part of
the year. Our Merchant and Micro Business Finance products are our fastest
growing lending product and accounted for 15% of TFV for the first nine months
of 2023. Lending to SME's is a significant and underpenetrated opportunity in
Kazakhstan and an important priority for us.

Our average net loan portfolio increased by 35% year-over-year, to KZT3.6
trillion during the third quarter of 2023. Our deposit base has seen
substantial growth since the second half of last year and in the third quarter
of 2023, average savings increased by 42% year-over-year to KZT4.7 trillion.
Deposit consumers increased 30% to 4.5 million, illustrating our success at
attracting new consumers, as well as more funds from existing customers.
Following this strong growth in deposit consumers and deposit inflows, our
loan to deposit ratio fell to 79% at the end of September 2023, from 83% in
same period in 2022.

During 2022 we raised Kaspi Deposit rates and higher funding costs are
resulting in lower near-term Fintech profitability. However, more deposit
consumers and an enlarged funding base, will enable us to drive faster
origination and more transactions over the medium-term. Hence, we expect our
loan to deposit ratio to gradually move up again.

Portfolio conversion of 2.2x for the first nine months of 2023, is in line
with trends over the last year, reflecting ongoing high early repayments
levels and is indicative of financially healthy consumers borrowing,
transacting and repaying quickly. With no deterioration in consumer credit
quality, we expect to continue benefiting from rapid portfolio conversion.

Fintech yield was 19% (non-annualised) during the first nine months of 2023,
in line with our expectations and reflecting the growing share of lower
yielding BNPL and Merchant Finance loans.

During the first nine months of 2023, our cost of risk was 1.5%
(non-annualised), with credit quality strong and consistent with trends seen
over the last year. Low credit cost of risk in part reflects the low-risk
nature of our products, especially BNPL. Our nine months 2023 NPL ratio of
5.7%, down from 6.3% at the end of 2022 reflects the normal seasonality we
have described previously. NPLs are expected to remain around current levels
for the remainder of the year.

Fintech Platform revenue increased by 39% year-over-year to reach KZT268
billion, during the third quarter of 2023. Fintech revenue growth is
benefitting from healthy levels of origination over the nine months, slightly
offset by lower yielding BNPL. For the first nine months of 2023, Fintech
revenue increased by 40% to KZT748 billion.

In the third quarter of 2023, Fintech Platform's net income increased by 17%
year-over-year to reach net income of KZT77 billion. Net income growth below
revenue growth, mainly resulted from higher year- over-year funding costs.
When interest rates normalise, we'd expect newly acquired customers to stay
with us, resulting in Fintech net income growth accelerating. For the first
nine months of 2023, Fintech net income increased by 29% year- over- year to
reach net income of KZT221 billion.

Our Fintech Platform remains well positioned, as evidenced by ongoing growth
in loan and deposit customers, as well as deposit inflows. We believe
structural top-line growth will be driven by BNPL as well as merchant and SME
financing, both of which are underpenetrated in Kazakhstan. We believe
bottom-line growth will benefit through-the-cycle, from normalising funding
costs and we will continually improve our risk management capabilities, which,
in combination, points to a robust top and bottom-line mid-term outlook for
Fintech.

Update on the acquisition of Kolesa Group

In July we announced that we had entered into an agreement to acquire 39.76%
of Kolesa Group, from an indirect subsidiary of Baring Vostok Private Equity
Fund V.

Kolesa owns Kazakhstan's leading car and real estate online classifieds,
Kolesa.kz and Krisha.kz. In addition, Kolesa also owns Avtoelon.uz, the
leading online car classifieds in Uzbekistan. Just like Kaspi.kz, Kolesa.kz
and Krisha.kz have no.1 brand recognition.

Combined with our classifieds in Azerbaijan, Kolesa gives Kaspi.kz a portfolio
of leading, fast growing classifieds across three countries.

The transaction has now completed and Kolesa will be included in Kaspi.kz's
consolidated financials going forward.

GDR buyback program

In July 2023 we announced the commencement of a 3-month GDR repurchase
program, which has subsequently been concluded, with 283,689 GDRs repurchased.
Since our initial GDR repurchases commenced in April 2022, we have repurchased
GDRs equivalent to $248 million.

Our Board of Directors has subsequently approved a new GDR repurchase program
of up to $100 million.

Total GDR's outstanding as at 30 September 2023 were 189,684,528.

Conference call invitation

On Monday, 23 Oct 2023 the management will hold a conference call and webcast
at 1.00pm (London) (8.00am U.S. Eastern Time, 6.00pm Astana time) to review
and discuss the company's results for the quarter ending September 30, 2023.

To pre-register for this call, please go to the following link:

https://www.netroadshow.com/events/login?show=35148760&confId=56087

You will receive your access details via email.

Kaspi.kz Platform Income Statements

Change in terminology

TPV (total payment value) - replaces RTPV and is defined as the total value of
B2B and payment transactions made by Active Consumers within our Payments
Platform, excluding free P2P and QR payments

Net fee revenue - combines (1) Fee, commissions & other, (2) Transaction
& membership revenue, (3) Seller fees and (4) Rewards as previously
reported.

 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. To deliver upon this we operate a unique
two-sided Super App model - Kaspi.kz Super App for consumers and Kaspi Pay
Super App for merchants.

The Kaspi.kz Super App is Kazakhstan's most recognised mobile app, with 13.5
million MAU in 3Q 2023, 8.8 million of whom access our services daily. The
Kaspi Pay Super App is the digital partner of choice for businesses and
entrepreneurs in Kazakhstan, with 565K merchant partners as of nine months
2023.

Through these Super Apps consumers and merchants can access our Payments,
Marketplace, and Fintech Platforms. All our services are designed to be highly
relevant to users' everyday needs and enable consumers and merchants to
connect and transact, using our proprietary payments network.

In partnership with Magnum, Kazakhstan's largest food retailer, we have
launched e- Grocery. Together we are digitalising food retail, with the aim of
creating a dramatically better shopping experience. Consumers access e-Grocery
using the Kaspi.kz Super App, can choose from a wide selection of products, at
competitive prices, with free same-day delivery.

The combination of a large, highly engaged consumer and merchant base, highly
relevant digital products and a capex lite approach, results in strong
top-line growth, a profitable business model and enables us to continue
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

 

 

 

 

 

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