Swvl Holdings Corp (Nasdaq: SWVL), an Egypt-born global provider of mobility solutions for businesses and governments, announced a significant turnaround in its financial performance for fiscal year 2023. The company achieved positive net profit and cash flow for the full year, despite incurring losses from previous acquisitions.
Swvl successfully completed its profitability program initiated in 2022. While the company recorded $8.2 million in losses from subsidiary sales, it achieved a net profit of $3.1 million, a significant improvement from a net loss of $123.6 million in 2022. Gross profit grew eightfold to $4.1 million from $0.5 million in 2022, and operating profit reached $12.1 million compared to an operating loss of $80.2 million in the prior year.
Swvl’s strong balance sheet reflects its financial stability. The company ended the year with no debt and its equity value more than doubled to $5.9 million compared to $2.6 million in 2022.
“Our team’s dedication and focus on financial stability resulted in profitability,” said Swvl CEO Mostafa Kandil. “We are committed to innovation and plan to launch new products in upcoming markets while expanding strategic partnerships in the GCC countries.”
Swvl’s Nasdaq journey has been volatile. After delisting from the Nasdaq Global Market to the Nasdaq Capital Market in July 2023, its share price plummeted from a high of $9.95 to $0.84. Despite efforts like share consolidation and divesting Urbvan, a Mexico-based acquisition, the company’s share price remained low.
However, the recent profitability announcement has boosted investor confidence, with Swvl’s shares now trading at $10. In December 2023, the company reported a shift in operating profits from a loss of $56.0 million to a profit of $13.4 million, despite a decrease in revenue.
Swvl’s sale of Urbvan Mobility for $12 million, a fraction of the $82 million acquisition price in July 2022, raised questions about its financial strategy. The fire sale highlights the challenges faced by the company in the competitive mobility tech sector.
Despite the Urbvan setback, Swvl maintains that its acquisition strategy was beneficial. Kandil explained, “We acquired companies using stock, not cash. We paid a fixed price per share, resulting in a profit on each acquisition. While some companies were divested, others played a crucial role in our growth.”