EXECUTIVE OVERVIEW

Letshego Africa Holdings’ collective operations across sub–Saharan Africa recorded a double digit increase in operating income for the year ended 31st December 2024. Bottom line performance was however dampened by an ultimate net loss, though the quantum has greatly reduced from the net loss recorded for the full year 2023.

Topline year on year income growth reaffirms that the business business fundamentals remain strong Profit growth continues to be driven by our three core markets, Botswana, Namibia and Mozambique that collectively contribute over 80% of the Group‘s total profits. In East and West markets, we are seeing green shoots with Ghana and Tanzania both showing good growth in short term loans year on year of 125% and 568% respectively.

After tax losses for the year are largely attributable to a 12% increase in taxation for the year, driven by increased tax obligations from improved performance in our top three markets, as well as prior year adjustments. A more detailed breakdown of our Effective Tax Rate is available in our financial overview and financial statements.

From a risk perspective, we are priortising attaining global standards in effective risk management. Our Enterprise Risk Management Framework continues to adapt around evolving business activities and trends in third party risk and ever-changing market environments. Recent updates include our Sustainability, Environmental and Social Governance standards.

Our loan loss ratio increased in 2024 to 5.4% from 3.3% the prior year. The Group was still exposed to low performing portfolios originating in the previous years where the Group took incremental provisions and write-offs. In this reporting period, we tightened our credit provisioning as well as write off policies early in the year. The Group took strategic decisions to derisk some challenging business segments during the year. Credit risk frameworks have also been adjusted for new product launches in our markets, giving us confidence that we will achieve our portfolio risk appetite in 2025.

Shareholder updates published on the Botswana Stock Exchange in the second half of the year reiterate the Group’s commitment to reviewing its participation model in East and West Africa markets. The objective of this process is to unlock shareholder value for the Group as a whole. A formal exploratory process is underway, however we wish to remind shareholders that such initiatives take time, and there is no guarantee a transaction will result.

Looking forward, we are building on learnings gained from our previous strategy and will be refining our focus to scaling our Deduction at Source portfolio, extending the reach of Short Term Lending and accelerating deposit mobilisation. Effective cost management and increasing efficiencies in collections and recoveries also remains integral to balancing our business flows.

FINANCIAL METRICS

• Net interest income up 32% to BWP2.33 billion (FY 2023: BWP1.77 billion)
• Non-funded income up 4% to BWP536 million (FY 2023: BWP514 million)
• Profit before tax up 91% to BWP232 million (FY 2023: BWP121 million)
• Loss after tax of BWP70 million down 53% (FY 2023: BWP149 million)
• Net advances up 1% to BWP13.6 billion (FY 2023: BWP13.5 billion)
• Customer deposits up 40% to BWP2.1 billion (FY 2023: BWP1.5 billion)
• Loan loss ratio of 5.4% (FY 2023: 3.3%)
• Cost-to-income ratio of 64% (FY 2023: 74%)
• Effective tax rate (ETR) of 130% (FY 2023: 223%)
• Basic loss per share (6.3)thebe (FY 2023 (9.3) thebe)
• Loss on Equity (ROE) of (1%) (FY 2023: (3%))
• Capitalisation ratio 24% (FY 2023: 24%)
• Debt-to-equity ratio of 195% (FY 2023: 183%)

Macro Economic Outlook

As per the World Bank outlook, Sub Saharan Africa GDP growth is projected to accelerate to 4.1% in 2025 and 4.3% in 2026 on the back of declining inflation and easing monetary policy. South Africa and Nigeria’s growth rate will be somewhat lower than the rest of the region. The Group considers potential downside pressure on economic recoveries from events such as US Sanctions, Anti-Immigration policies, Aid cuts, tariffs, attendant trade wars and lingering geopolitical tensions. Potential ripples from such global events could affect fiscal deficits, domestic currencies and debt positions across a number of Letshego subsidiaries in 2025 through to 2026. In line with Letshego’s long standing experience gained from operating in emerging markets, the Group consistently stress tests its business strategy against current and emerging risks, proactively implementing mitigating actions where necessary.

Strategic Outlook

Our business fundamentals remain strong, reinforced by the sustained momentum observed in the latter half of the review year. In 2024, our operations continued to be affected by foreign exchange fluctuations, inflationary volatility, elevated direct costs and tax. We will continue to mitigate risks by enhancing collection and recoveries, accelerating portfolio remediation efforts, and enforcing stringent cost controls.

Our priority is executing our refreshed strategy, building on previous experience and lessons learnt to generate higher returns. The focus is to enhance our core Deduction at Source product, scale short-term credit solutions, and accelerate payment capabilities to drive deposit growth. This will be underpinned by disciplined risk and cost management.

We will review our market participation in East and West Africa, assessing opportunities that leverage our strength. We are committed to optimising internal processes and leveraging strategic partnerships to reduce costs and improve service efficiency.

Despite challenges in 2024, we are strategically positioned to restore long-term profitability. With a focused product strategy, disciplined risk management, and stringent cost management, we are taking steps to build resilient growth and creating lasting value for our stakeholders.

UNAUDITED FINANCIAL STATEMENTS

The financial statements from which the financial information is set out in this announcement has not been audited by Ernst & Young, Letshego Group’s external auditors. On completion of the audit their report will be available for inspection at the Group’s registered office and on the Group’s website on or before 31 March 2025.

For and on behalf of the Board of Directors:

Philip Odera
Group Chairman

Brighton Banda
Interim Group Chief Executive

7 March 2025

Related Downloads

Letshego Africa Holdings Group Full Year Results December 2024 – Fact Sheet.pdf

Letshego Africa Holdings FY2024 Unaudited Condensed Consolidated Financial Statements.pdf

Letshego Africa Holdings Full Year Results December 2024 Presentation.pdf