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Karooooo Limited, a leading mobility platform led by South African businessman Zak Calisto, has announced a single-digit decline in profit for the nine months of its 2022 fiscal year, with earnings falling below R379.4 million ($24.9 million) despite a significant growth in sales.
Despite continued interruptions resulting from the COVID-19 pandemic’s effect on Karooooo’s operations, its business strategy pushed new client acquisitions, which contributed to revenue growth.
Over the nine-month period, revenue rose by about 20 percent, from R1.67 billion ($109.78 million) last year to more than R2 billion ($131.5 million) due to a 37-percent increase in subscribers from 1.24 million to around 1.4 million.
The rise in sales did not translate to an increase in profitability, as profit for the Singapore-based firm declined by 3.9 percent, from R394.9 million ($25.96 million) to R379.4 million ($24.9 million) when compared to the same period last year.
The single-digit decline in earnings can be linked to expenses and cost-related items, as earnings were impacted by an increase in operating expenses and other additional charges, which included IPO costs that had been fully accounted for by the end of Q1 2022.
On the flip side, the company reported a double-digit growth in profit for the quarter ending Nov. 30 thanks to a long-term sustained growth in subscribers, which resulted in a 22-percent increase in revenue.
Its total assets climbed from R2.9 billion ($190.6 million) to R3.1 billion ($203.7 million), and its retained income attributable to shareholders increased from R815.2 million ($53.6 million) to R1.16 billion ($76.3 million).
While commenting on the performance, Zak Calisto, Karooooo’s CEO and founder, said the scale of data on its platform is vast and growing, and the company will continue to leverage its billions of data points daily, allowing it to provide differentiated and innovative insights to customers, enriching their day-to-day operations.
“We believe that there is a significant economic upside to the large data pool that we have built and continue to build. Further, we believe that there is significant untapped network effect value for other much-needed related services given the size of our subscriber base,” he said.
Calisto established Karooooo in 2001, first focusing on stolen car recovery services in South Africa. Cartrack, a wholly-owned subsidiary that provides real-time mobility data analytics solutions for smart transportation, is now managed by the corporation.
Karooooo has evolved into a major international provider of smart transportation management and analytics since 2001, serving customers in 23 countries across five continents and supporting more than 1.4 million users globally.
As of press time, Jan. 20, the company’s stock was trading at $36.11 per share, 3.14-percent higher than their opening price on Nasdaq.
