Net Revenues for the Second Quarter 2023 of
Removal of Certain of Nigeria’s Foreign Exchange Restrictions Expected to Accelerate Dollarization of Business, However
Export Business Commenced Sales in
Investment Purchase of 6 Million Tingo Mobile Handsets for
Announces Board Approval of Quarterly Dividends, to Set Record Data as Soon as Practicable
Management to Host Conference Call Today at
Highlights & Recent Developments
Financial Results
- Net revenues of
Tingo Group for the second quarter 2023, were$977.2 million , compared to$12.0 million for the second quarter 2022, up 8,072%. - Revenue growth of 14.8% compared to the first quarter of 2023 was achieved despite the devaluation of the Naira against the
U.S. Dollar of 66.4%, and the change of Nigeria’s’Presidential Administration adversely impacting economic conditions. - Gross profit of
Tingo Group for the second quarter 2023, was$346.0 million , compared to gross profit of$2.1 million for the second quarter 2022. - Operating profit of
Tingo Group for the second quarter 2023, was$181.7 million , compared to a loss of$13.8 million for the second quarter 2022. - EBITDA1 of
Tingo Group for the second quarter 2023, was$283.1 million , compared to a EBITDA1 Loss of$12.2 million for the second quarter 2022. - EBITDA1 per share attributable to
Tingo Group for the first half 2023 of$4.03 based on the weighted average shares outstanding atJune 30, 2023 , and$1.25 per share on a fully diluted basis. - Profit after tax per share attributable to
Tingo Group for the first half 2023, of$1.68 based on the weighted average shares outstanding atJune 30, 2023 , and$0.52 per share on a fully diluted basis. Tingo Group invested heavily in the growth of Tingo Mobile,Tingo Foods and Tingo DMCC during the quarter, including: (i) making an upfront payment of$434.2 million on the purchase of 6 million handsets for new AFAN customers; (ii) prepaying AFAN for produce forTingo Foods and settling their brought forward payables, resulting in a total net outlay of$336.1 million ; and (iii) self-funding stock purchases of$225.8 million for Tingo DMCCs export sales, the revenues for which are scheduled to be received during the third quarter. In addition, tax payments totaling$174.0 million were made for Tingo Mobile on its taxable earnings for fiscal year 2022, and the Company also incurred a foreign exchange loss. As a result, the balance of cash and cash equivalents atJune 30, 2023 , decreased to$53.2 million , compared to$76.1 million atJune 30, 2022 .
1EBITDA (Earnings Before Interest Tax Depreciation and Amortization) is considered a non-GAAP measure of financial performance). See reconciliation of EBITDA to Operating Profit in the summarized financial results below.
Operational Milestones
- Commenced first export sales through Tingo DMCC in
May 2023 , generating$348.0 million of revenue. - Purchased 6 million mobile phone handsets to supply to new AFAN customers. The delivery and distribution of the handsets is expected to occur within the next 60 days and result in a material increase in Tingo Mobile’s revenues and earnings thereafter.
- Expanded the product range of
Tingo Foods through the addition of two new product categories: wheat and maize products.The Tingo Foods business has continued to strengthen its supply chain and also recently onboarded a major new customer. - Signed an exclusive agreement with
Prime Commodity Exchange (PCX) and AFAN, securing considerable additional supply of produce forTingo Foods and Tingo DMCC, as well as nationwide warehousing facilities and enhanced commodity trading opportunities. - Provided a ₦3 Billion (approximately USD
$6.5 Million ) loan facility to AFAN, which is expected to be followed by subsequent similar loans, for the purposes of cultivating new farming land for crop production. The first loan is in the process of being utilized by AFAN and its farmers to cultivate 3,000 hectares of new farming land for rice and wheat production, and to accelerate the onboarding of AFAN’s warehouses to the Tingo Mobile partnership withPrime Commodity Exchange (“PCX”). - Construction work on the new
Tingo Foods processing facility continues to progress. The joint venture construction partner for the facility has confirmedTingo Foods is expected to be in a position to commence operations by mid-2024. - Engaged Independent Counsel to undertake an Independent Investigation into allegations made against the Company.
Central Bank of Nigeria is currently processing an application made by Tingo Mobile to convert$20 million of Naira intoU.S. Dollars for the purpose of paying the Company’s first quarterly dividend to shareholders.
“The near 70% depreciation of the Naira against the
“Of particular note, our Tingo DMCC export and commodity trading business, which completed its first trades during the quarter and should benefit markedly from the recently signed Afan and PCX partnership agreement, is expected to deliver significant growth in the second half of the year both in terms of revenue and earnings. Most importantly, the majority of Tingo DMCC’s revenues are expected to be received in
“Tingo Mobile is also on track to generate significant growth following the forthcoming delivery and distribution of the 6 million new handsets that were ordered in the second quarter. Each new handset is expected to generate a combination of lease revenues as well as transactional fees and commissions from our Nwassa platform and agricultural marketplace, the latter of which delivers a gross margin of around 98%. In addition, Tingo Mobile, in partnership with AFAN and the
“Finally, today’s announcement of our commencement to pay a quarterly dividend marks an important part of our strategy for maximizing shareholder value. With our Tingo DMCC export and commodity trading business well placed to deliver significant
Dozy Mmobuosi, Founder & CEO of
“Turning back to the business, I am pleased to report that the construction contractor of the new
“Ever since I had the ambition to achieve a listing of Tingo Mobile on a major stock exchange, it has been my goal to maximize shareholder value and also give something back to those who invested in us. I am therefore delighted that we have today announced the commencement of a quarterly dividend, which I am confident we will be in a position to grow from next quarter onwards.
“Despite the challenges and distractions our management team have had to endure this quarter, I am immensely proud that we have continued to expand the business and further strengthen our ecosystem to and provide a strong bedrock of support from which to deliver long term growth and shareholder value.”
First Half 2023 Financial Review
- Net revenues for the six months ended
June 30, 2023 , were$1,8 million , compared to$21.5 million for the six months endedJune 30, 2022 , an increase of 8,396%. The increase is mainly attributable to the addition of theTingo Mobile and Tingo Foods acquisitions completed onDecember 1, 2022 , andFebruary 9, 2023 , respectively, and the commencement of export trades through Tingo DMCC inMay 2023 . - Gross profit for the six months ended
June 30, 2023 , was$732.9 million , or 40% of revenues, compared to$3.3 million , or 15.5% of revenues, for the six months endedJune 30, 2022 . The increase is mainly attributable to the addition of theTingo Mobile and Tingo Foods acquisitions completed onDecember 1, 2022 , andFebruary 9, 2023 , respectively, and the commencement of export trades through Tingo DMCC inMay 2023 . - Selling and marketing expenses for the six months ended
June 30, 2023 , were$174.2 million as compared to$3.6 million for the six months endedJune 30, 2022 . The increase was due to an increase in marketing expenses from the inclusion of sales and marketing expenses forTingo Foods and Tingo Mobile, which was offset in part by a decrease in marketing expenses for the stock trading businesses. - General and administrative expenses for the six months ended
June 30, 2023 , were$53.0 million , compared to$21.0 million for the six months endedJune 30, 2022 , mainly attributed to the addition of costs fromTingo Mobile and Tingo Foods , and an increase in share-based payments totalling$3.7 million . - Operating profit for the for the six months ended
June 30, 2023 , was$442.4 million versus an operating loss of$23.7 million for the six months endedJune 30, 2022 . The increase in profit from operations is mainly attributed to the acquisitions ofTingo Mobile and Tingo Foods and the commencement of export trades through Tingo DMCC, as explained above. - Net income for the six months ended
June 30, 2023 , was$273.2 million compared to a net loss of$23.0 million for the six months endedJune 30, 2022 , primarily as a result of the acquisitions ofTingo Mobile and Tingo Foods , and the commencement of export trades through Tingo DMCC inMay 2023 . - Consolidated EBITDA1 for the for the first half of 2023, was
$655.3 million compared to Consolidated EBITDA1 Loss of$21.2 million for the six months endedJune 30, 2022 .
First Quarter 2023 Results Conference Call
A presentation will accompany the conference call, which can be viewed during the webcast or accessed via the investor relations section of the Company’s website here.
To access the call, please use the following information:
Date: | |
Time: | |
Dial-in: | 1-877-704-4453 |
International Dial-in: | 1-201-389-0920 |
Conference Code: | 13740949 |
Webcast: | https://viavid.webcasts.com/starthere.jsp?ei=1631924&tp_key=954758cf88 |
A telephone replay will be available approximately two hours after the call and will run through
About
Disclaimer
The information in this news release includes certain information and statements about management and the Company’s board of director’s view of future events, expectations, plans and prospects that constitute forward looking statements. These statements are based upon assumptions that are subject to significant risks and uncertainties. Because of these risks and uncertainties and as a result of a variety of factors, the actual results, expectations, achievements or performance may differ materially from those anticipated and indicated by these forward-looking statements. Any number of factors could cause actual results to differ materially from these forward-looking statements as well as future results. Although the Company believes that the expectations reflected in forward looking statements are reasonable, it can give no assurance that the expectations of any forward-looking statements will prove to be correct. These forward-looking statements involve a number of risks, uncertainties or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those discussed and identified in public filings made with the
Investor Relations Contact
949-491-8235
TIO@mzgroup.us
www.mzgroup.us
TINGO GROUP, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(USD In Thousands, Except Share and Par Value Data)
2023 | 2022 | ||||
ASSETS | |||||
Current assets: | |||||
Cash and cash equivalents | $ | 53,195 | $ | 500,316 | |
Trade accounts receivable, net | 366,022 | 11,541 | |||
Inventories | 142 | - | |||
Related party receivables | 8,812 | 13,491 | |||
Other current assets | 153,979 | 5,828 | |||
Total current assets | 582,150 | 531,176 | |||
Property and equipment, net | 591,282 | 855,125 | |||
Intangible assets, net | 292,801 | 185,407 | |||
211,849 | 101,247 | ||||
Right of use assets under operating lease | 1,400 | 2,260 | |||
Long-term deposit and other non-current assets | 463 | 514 | |||
Deferred tax assets | 3,549 | 3,661 | |||
Restricted cash escrow | 1,379 | 2,233 | |||
Micronet Ltd. equity method investment | 315 | 735 | |||
Total long-term assets | 1,103,038 | 1,151,182 | |||
Total assets | $ | 1,685,188 | $ | 1,682,358 | |
TINGO GROUP, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(USD In Thousands, Except Share and Par Value Data)
2023 | 2022 | ||||||
LIABILITIES TEMPORARY EQUITY AND EQUITY | |||||||
Short-term loan | $ | 165 | $ | 460 | |||
Trade accounts payable | 149,483 | 11,092 | |||||
Deposit held on behalf of clients | 1,493 | 2,528 | |||||
Related party payables | 25,606 | 57,506 | |||||
Current operating lease liability | 834 | 1,215 | |||||
Other current liabilities | 112,865 | 192,594 | |||||
Total current liabilities | 290,446 | 265,395 | |||||
Long-term loan | - | 377 | |||||
Long-term operating lease liability | 507 | 905 | |||||
Promissory note | 207,912 | - | |||||
Deferred tax liabilities | 108,974 | 89,597 | |||||
Other long-term liability | 644 | - | |||||
Accrued severance pay | 47 | 50 | |||||
Total long-term liabilities | 318,084 | 90,929 | |||||
Commitment and Contingencies (Note 11) | - | - | |||||
Temporary equity | |||||||
Preferred stock Series B subject to redemption: | 553,035 | 553,035 | |||||
Stockholders’ Equity: | |||||||
Preferred stock Series A: | 3 | 3 | |||||
Common stock: | 165 | 158 | |||||
Additional paid-in capital | 893,471 | 889,579 | |||||
Accumulated other comprehensive income (loss) | (520,627 | ) | 4,367 | ||||
Accumulated earnings (deficit) | 149,785 | (123,463 | ) | ||||
522,797 | 770,644 | ||||||
Non-controlling interest | 826 | 2,355 | |||||
Total stockholders’ equity | 523,623 | 772,999 | |||||
Total liabilities, temporary equity and stockholders’ equity | $ | 1,685,188 | $ | 1,682,358 | |||
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements. | |||||||
TINGO GROUP, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(USD In Thousands, Except Share and Earnings Per Share Data)
Six months ended | Three months ended | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Revenues | $ | 1,828,414 | $ | 21,521 | $ | 977,169 | $ | 11,958 | |||||||
Cost of revenues | 1,095,544 | 18,183 | 631,153 | 9,885 | |||||||||||
Gross profit | 732,870 | 3,338 | 346,016 | 2,073 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development | 696 | 941 | 333 | 346 | |||||||||||
Selling and marketing | 174,207 | 3,552 | 89,139 | 1,035 | |||||||||||
General and administrative | 53,043 | 20,991 | 23,416 | 13,665 | |||||||||||
Amortization of intangible assets | 23,763 | 1,594 | 12,644 | 797 | |||||||||||
Impairment of long-term assets | 38,771 | - | 38,771 | - | |||||||||||
Total operating expenses | 290,480 | 27,078 | 164,303 | 15,843 | |||||||||||
Profit (loss) from operations | 442,390 | (23,740 | ) | 181,713 | (13,770 | ) | |||||||||
Other income (loss), net | (363 | ) | 838 | (788 | ) | 683 | |||||||||
Financial income (expenses), net | (21,377 | ) | (1,089 | ) | (22,821 | ) | (1,167 | ) | |||||||
Profit (loss) before provision for income taxes | 420,650 | (23,991 | ) | 158,104 | (14,254 | ) | |||||||||
Income tax expenses (benefit) | 147,695 | (1,081 | ) | 61,781 | (5 | ) | |||||||||
Net profit (loss) after provision for income taxes | 272,955 | (22,910 | ) | 96,323 | (14,249 | ) | |||||||||
Loss from equity investment | (420 | ) | (371 | ) | (212 | ) | (187 | ) | |||||||
Net profit (loss) | 272,535 | (23,281 | ) | 96,111 | (14,436 | ) | |||||||||
Net loss attributable to non-controlling interests | (713 | ) | (258 | ) | (397 | ) | (99 | ) | |||||||
Net profit (loss) attributable to | $ | 273,248 | $ | (23,023 | ) | $ | 96,508 | $ | (14,337 | ) | |||||
Profit (loss) per share attributable to | |||||||||||||||
Basic profit (loss) per share | 1.68 | (0.18 | ) | 0.59 | (0.11 | ) | |||||||||
Diluted profit (loss) per share | $ | 0.52 | $ | (0.18 | ) | $ | 0.18 | $ | (0.11 | ) | |||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 162,764,178 | 124,455,921 | 164,199,357 | 126,431,864 | |||||||||||
Diluted | 525,786,518 | 124,455,921 | 527,222,097 | 126,431,864 | |||||||||||
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements. | |||||||||||||||
Non-GAAP Financial Measures
In addition to providing financial measurements based on generally accepted accounting principles in the
Management believes that EBITDA reflects our ongoing business in a manner that allows for meaningful comparisons and analysis of trends in our business, as they exclude expenses and gains that are not reflective of our ongoing operating results. Management also believes that EBITDA is a key measure used by our management team to evaluate our operating performance, generate future operating plans and make strategic decisions. The Company believes EBITDA is useful to investors for the purposes of comparing our results period-to-period and alongside peers and understanding and evaluating our operating results in the same manner as our management team and board of directors.
These supplemental measures should not be considered superior to, as a substitute for or as an alternative to, and should be considered in conjunction with, the GAAP financial measures presented. In addition, since these non-GAAP measures are not determined in accordance with GAAP, they are susceptible to varying calculations and may not be comparable to other similarly titled non-GAAP measures of other companies.
EBITDA does not replace the presentation of our GAAP financial results and should only be used as a supplement to, not as a substitute for, our financial results presented in accordance with GAAP.
EBITDA is defined as net income from continuing operations calculated in accordance with GAAP, less net income attributable to non-controlling interests, plus the sum of income tax expense, interest expense, net, depreciation and amortization (“EBITDA”).
The following is a reconciliation of net profit (loss), the most directly comparable GAAP financial measure, to EBITDA (a non-GAAP financial measure) for each of the periods indicated.
Three months ended | |||||||
(Dollars in Thousands,) | |||||||
2023 | 2022 | ||||||
Net profit (loss) attributable to | $ | 96,508 | $ | (14,337 | ) | ||
Adjusted for: | |||||||
Net loss attributable to non-controlling stockholders | (397 | ) | (99 | ) | |||
Loss from equity investment | 212 | 187 | |||||
Income tax expenses (benefit) | 61,781 | (5 | ) | ||||
Financial expenses, net | 22,821 | 1,167 | |||||
Depreciation and amortization | 102,202 | 838 | |||||
Total EBITDA net profit (loss) attributable to | $ | 283,127 | $ | (12,249 | ) |
Six months ended | |||||||
(Dollars in Thousands,) | |||||||
2023 | 2022 | ||||||
Net profit (loss) attributable to | $ | 273,248 | $ | (23,023 | ) | ||
Adjusted for: | |||||||
Net loss attributable to non-controlling stockholders | (713 | ) | (258 | ) | |||
Loss from equity investment | 420 | 371 | |||||
Income tax expenses (benefit) | 147,695 | (1,081 | ) | ||||
Financial expenses, net | 21,377 | 1,089 | |||||
Depreciation and amortization | 213,257 | 1,709 | |||||
Total EBITDA net profit (loss) attributable to | $ | 655,284 | $ | (21,193 | ) |
Source:
2023 GlobeNewswire, Inc., source