Tingo Group, Inc.

Net revenues for Q3 2023 were $586.21 million versus $13.8 million a year earlier, up 4,161%. Net revenues for 9M 2023 were $2.41 billion versus $35.3 million, up 6,740%. Gross profit was $137.9 million in Q3, or 24% of revenue, versus $3.2 million, or 23%, a year earlier; for 9M it was $870.8 million, or 36% of revenue, versus $6.5 million, or 19%. Operating profit was $50.1 million in Q3 versus an operating loss of $8.7 million, and $492.5 million for 9M versus a loss of $32.5 million. Net income was $20.7 million in Q3 versus a loss of $7.7 million, and $294.0 million for 9M versus a loss of $30.7 million. Adjusted EBITDA was $122.6 million in Q3 versus an EBITDA loss of $8.1 million, and $777.9 million for 9M versus a loss of $29.3 million. Cash and cash equivalents were $53.4 million at September 30, 2023, down from $500 million at December 31, 2022. Management did not provide formal numeric quarterly or full-year guidance, but said it expects Q4 to return to growth, expects 6 million phones to be received by end of November and deployed immediately after, expects the first $20 million dividend conversion approval soon, and expects to be back on track by year-end and in a strong position for 2024.

Kenneth Denos framed the quarter as one of resilience amid major headwinds, including a June short-seller attack, Nigeria currency devaluation, inflation, and political change. He emphasized the company’s integrated agri-fintech ecosystem, including Tingo Mobile, Tingo Foods, Tingo DMCC, and the newly launched TingoPay, and repeatedly pointed to long-term benefits from dollarization, expanded exports, and new markets such as Pakistan. His tone was optimistic and confident, especially around a rebound in Q4 and growth into 2024.

No separate CFO spoke; Denos covered the financial update and cash discussion. He cited 9M revenue of $2.41 billion, gross profit of $870.8 million, operating income of $492.5 million, and EBITDA of $777.9 million, while also noting major cash uses: $711.7 million upfront for 6 million handsets, $369.9 million in net outlays for AFAN produce and payables, $370.4 million in stock purchases for Tingo DMCC export sales, and $174 million in tax payments for 2022 taxable earnings. He said cash and cash equivalents fell to $53.4 million from $500 million at year-end 2022 because of those investments, FX losses, and taxes, and that the company started a quarterly dividend with the first payment being a $20 million FX conversion awaiting Central Bank of Nigeria approval.

Analysts focused on why Nwassa revenue fell, why Tingo Foods revenue dipped, why Tingo DMCC export revenue came in at about one-third of the prior expectation, and when the 6 million smartphones would arrive and be deployed. Management said all three businesses were hit by negative press, lost farmer/customer confidence, seasonal crop timing, and order postponements/cancellations, but claimed confidence was recovering through AFAN support. Denos said the phones should arrive by the end of November and be deployed immediately after, the facility should begin Phase 1 operations in 2024, the dividend FX approval is expected soon, and the board may later consider a special dividend or buyback.