Frontier Digital Ventures Reports “Milestone” Q3 Results as More Portfolio Companies Turn a Profit

The Malaysian-based online classifieds operator Frontier Digital Ventures has reported what it is calling a "milestone quarter" as more of its portal interests around the world begin to turn a profit. Highlights of the firm's Q3 activities included:

• Record revenues of A$ 17.3 million annualising at around A$ 70 million
• Portfolio EBITDA of A$ 1.2 million at a margin of 7% (like for like EBITDA margin before recent acquisitions would have been 13%)
• 11 of the 16 portfolio companies reported positive EBITDA for the quarter, up from 8 of 16 in the previous quarter
• Cash position of A$ 17.2 million as the company approaches cash flow breakeven

Frontier Digital Ventures (FDV) owns shares in several leading property verticals in emerging markets including a 30% stake in leading Pakistani property portal Zameen and 100% of InfoCasas, the leading vertical in Uruguay, Bolivia and Paraguay.

InfoCasas was a standout performer in Q3 as the brand's revenue of A$ 4.3 million surpassed the previous quarter by 66% and was 224% up on the corresponding period in 2020. Elsewhere there were notable revenue gains for FDV's West Africa division (PropertyPro in Nigeria and MeQasa in Ghana) where revenue was up 42% and at Latin American horizontal Encuentra24 where revenue was up 17% on the previous corresponding period.

In October 2020 FDV acquired Colombian real estate vertical Fincaraíz, Moroccan generalist Avito and Tunisian generalist Tayara from Adevinta before following up in February this year with the purchase of Chilean horizontal player Yapo from the same seller for a reported $19.5 million.

Bought whilst unprofitable, these businesses are moving in the right direction with Fincaraíz EBITDA positive for the quarter and Avito (-357k) trialling initiatives to enable on-platform transactions in the property and car verticals.

A move towards transactional-based operations was mentioned by company CEO Shaun Di Gregorio in his comments accompanying the presentation of the results:

“This has been an exceptional quarter for FDV, with the Company now approaching cashflow breakeven (again) following the recent Adevinta acquisitions. These acquisitions are still all tracking at or above our expectations, with Yapo delivering positive EBITDA in 3Q 2021 for the first time under  FDV ownership. 

We remain focused on augmenting the market leadership positions of our operating companies with high growth transaction-based revenues. The performance of Zameen and InfoCasas highlights the significant revenue growth and equity value that can be created as our operating companies facilitate an increasing number of property and auto transactions in their respective markets."

FDV is listed on the Australian Stock Exchange and saw its share price rise significantly on the back of its Q3 results, surging up from A$ 1.51 on Wednesday to A$ 1.82 per share at the close today.

The next target for Di Gregorio is the inclusion of FDV on the prestigious S&P/ASX 300 Index:

FDV is in an enviable position, with significant funding flexibility to continue to take advantage of market opportunities as they arise, in line with FDV’s long-term value creation strategy for shareholders. We are excited about the months and years ahead, with FDV now within sight of  S&P/ASX 300 Index inclusion.”