VEF (VEFL SDB) Q2 2024 earnings summary

Executive summary

• NAV at quarter-end was USD 436.6 million, down 2–2.5% quarter-on-quarter due to FX headwinds, but up from 4Q22 lows, with share price growth outpacing NAV per share and the NAV discount narrowing.

• Over 90% of the portfolio is break-even or profitable, with key assets like Creditas, Konfío, and Juspay achieving profitability and re-accelerating growth.

• Portfolio companies are forecasted to deliver 30% revenue growth and 60% gross profit growth over the next twelve months.

• Creditas achieved its first profitable quarter, with gross margins at 42.5% and renewed IPO intentions.

• The company is focused on strengthening the balance sheet through exits, capital recycling, and preparing for new investments as market opportunities improve.

Financial highlights

• NAV per share decreased 1% in USD to 0.42 but increased 4% in SEK to 4.45 during 1H24.

• Net result for 2Q24 was USD -11.2 million (2Q23: 68.7 million); EPS was USD -0.01 (2Q23: 0.07).

• Cash and liquidity investments totaled USD 15.8 million at end-1H24.

• Portfolio fair value at 2Q24 was USD 458.6 million, with top holdings in Creditas (USD 215.9 million), Konfío (USD 75.5 million), and Juspay (USD 70.1 million).

• Ended the quarter with a net cash negative position of USD 22.2 million, after paying down USD 10 million of bond debt in Q4 2023.

Outlook and guidance

• Confident in compounding NAV as portfolio companies sustain profitability and accelerate growth.

• Expecting 30% revenue and 60% gross profit growth in the next twelve months, with slight reduction in gross profit growth due to slower margin expansion.

• Anticipates at least two more capital raises in the portfolio by year-end, with more expected into 2025.

• Exits, including partial sales, are targeted for 2024-2025 to strengthen the balance sheet and support share price evolution.

• Focus remains on closing the share price discount to NAV and considering selective new investments as market conditions improve.