All Regions Cash Flow Positive for Frontier Digital Ventures in Q2 Despite Continued Zameen Slowdown

July 31, 2023
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The ASX-listed online marketplace operator Frontier Digital Ventures (FDV) has released a financial update for the second quarter of the year. Notable points from the company's release included:

  • Quarterly revenue of A$19.1 million.
  • EBITDA for the quarter stood at A$1.1 million with an EBITDA margin of 9%.
  • All but two portfolio companies were EBITDA positive for the quarter with all three operating regions cashflow positive.

FDV owns and operates 12 online classifieds marketplaces across three regions worldwide and holds a 30% stake in the leading Pakistani property portal, Zameen and a 37% stake in Pakistani autos vertical PakWheels.

The company has been enacting a series of cost-cutting measures across its portfolio and is beginning to see rewards, particularly in the brands it has taken over within the last few years.

The Chilean generalist site Yapo, which was acquired from Adevinta in February 2021, saw a marked turnaround in profitability in Q2. The company went from the most significant loss maker in FDV's whole portfolio in the comparison period to its most profitable in 2023 registering EBITDA of A$476k for the quarter.

There was a similar turnaround for Moroccan generalist Avito which saw Q2 EBITDA of A$272k, up from a loss of A$203k in the same period of 2022.

Pakistan's turbulent political situation and economy continue to have a sizeable impact on FDV's financials with the country's leading real estate portal Zameen seeing revenue drop 64% on 2022's numbers. On an equity accounted basis, FDV's share of Zameen remained profitable on an EBITDA basis logging quarterly EBITDA of A$56k.

Zameen's parent company, Dubizzle Group which owns portals in the MENA region, is gearing up for an IPO in the near future and FDV remains supportive of its fellow shareholder's plans. One slide on the company's investor presentation did raise the possibility of a potential future liquidity event that could see FDV's Asian assets merge with competitors.

In terms of operational updates, the company noted that its Burmese autos portal CarsDB had been merged with FDV's regional real estate portal iMyanmarHouse to consolidate the two brands and create the "largest online classifieds group in Myanmar". The second quarter also saw the launch of an MLS-style platform for brokers in Colombia and Chile to see each other's listings and collaborate on sales.

July 31, 2023
Since March 2020 Edmund's job has been to read about, write about, collect data on, analyse and generally know about real estate marketplaces and the companies that run them. Before that he worked at the aggregator Mitula Group (which became Lifull Connect) for five years.

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