Revenue Up 3%, EBITDA Down at Frontier Digital Ventures as Tough Conditions Bite in Q4

The Malaysia-based marketplace operator Frontier Digital Ventures has revealed that it saw 3% revenue growth in 2024 while EBITDA shrunk by 13% amid "tough trading conditions".

Commenting on the results, FDV's Founder and CEO, Shaun Di Gregorio, said:

"2024 was undoubtedly a challenging year, with tough trading conditions affecting many of our markets. Despite these headwinds, we are pleased to close the year with solid quarterly revenue results from FDV Asia and MENA Marketplace Group. While 360 LATAM was impacted by a decline in InfoCasas transaction volumes, Encuentra24, Fincaraíz and Yapo have all grown revenue."

ASX-listed Frontier Digital Ventures operates 14 online marketplace brands in emerging markets in three different regions, which operate independently of one another under regional umbrella brands.

New transactional model brings headaches in Latin America

In Latin America, where FDV's portfolio brands operate under the 360 LATAM umbrella, quarterly revenue (A$11.8M) was down 18% year-on-year. The blame for the drop was laid squarely on the InfoCasas brand which operates in its native Uruguay, Peru and Paraguay.

While Fincaraíz, Encuentra24 and Yapo (the latter following a re-platforming effort) all saw revenue increase on a quarterly and yearly basis, InfoCasas suffered a 52% quarterly drop off in revenue compared to Q4 of 2024.

InfoCasas has been attempting to move to a model which sees it split commissions with brokers in markets where primary real estate predominates. FDV admitted that the switch has been challenging with lead attribution and leakage a big problem along with the large sums of working capital needed.

The portal is now transitioning to a model which will see it take more control of the process and complete transactions on its MLS-like Iris platform rather than externally. According to a company presentation, this new model is already seeing a lead conversion rate of around five per cent and higher margins than the previous iteration.

Modest upticks in Africa and Asia

There was better news for FDV's Middle East and North African brands under its MENA Marketplaces Group (MMG) umbrella. MMG achieved record revenue of A$2.9M, increasing 9% year-on-year in the quarter.

Avito, the Moroccan general classifieds brand followed through on plans to launch a standalone real estate vertical in January in line with the corporate strategy of increased verticalization.

In Asia, despite FDV's decision to impair its holding in the underperforming Filipino online brokerage Hoppler, there were encouraging signs. The Filipino autos vertical AutoDeal saw record profits while the Burmese real estate vertical iMyanmarHouse saw record revenue of A$1M in Q4.

Perhaps the most welcome news for shareholders came from Pakistan where inflation is slowly receding and rates are being cut. FDV owns shares in the country's leading real estate vertical Zameen as well as autos vertical PakWheels. On an FDV economic share basis, Zameen's revenues stood at A$2.72M, up 10% year-on-year.

Outlook and strategic review

Over the last two years, FDV's share price has suffered badly in the face of regional trading headwinds. In late 2022 the company's share in the Pakistani real estate portal Zameen dramatically dropped in value as the local housing market reacted to political turmoil in the country.

Although other companies in FDV's portfolio have managed to ameliorate reported revenue figures since Zameen's drop-off, the company has struggled to win Australian investors over and in Q3, the company announced that it was beginning a strategic review of the assets under its 360 Latam brand.

Addressing investors in FDV's Q4 missive, Di Gregorio gave an update on the review and addressed shareholder concerns:

"In 4Q we appointed RBC as our financial advisor to assist with the strategic review, which is progressing well. The strategic review is investigating options to unlock and maximise shareholder value, with a focus on 360 LATAM."

"We recognise that the decline in our share price over the last 12 months has been concerning for shareholders. This only sharpens our commitment to achieve positive free cash flow in 2025 to provide a strong platform for sustainable growth."