JSE-listed Karooooo is gaining traction in Southeast Asia operations, as the company expands the market for its fleet management solutions.
Karooooo, which owns Cartrack, today reported record earnings and cash generation for the first quarter of 2023, saying the company has multiple levers for expansion and is well-positioned to capitalise on a large and growing market opportunity.
The vehicle tracking system market is expected to reach $18.89 billion by 2026, according to Pragma Market Research.
Zak Calisto, Karooooo CEO and founder, says to garner a significant market share, the company is maximising the value of data through its IOT SaaS cloud, “with an offering that extends beyond connected vehicles and equipment to assisting more than 90 000 diverse enterprise customers to digitally transform their operations”.
On Karooooo’s growth in Asia, Calisto says: “The traction in our Southeast Asia operations was particularly encouraging. As COVID-19 disruptions eased, we accelerated the investment in our operations in this region. Among other highlights, Coca-Cola selected Cartrack as their technology partner in the Philippines to strengthen their operations.”
The company recently penned a deal with Coca-Cola in the Philippines to manage almost 3 000 trucks and over 2 000 sales service vehicles on Cartrack’s mobility platform.
In the current reporting period, Calisto says, despite global economic headwinds, specifically higher energy, raw material prices and electronic component shortages, Karooooo maintained the momentum of top-line growth.
“Total revenue was up 28% to R801 million (Q1 2022: R626 million). Revenue growth coupled with ongoing operating efficiencies resulted in profit for the period increasing 44% to R156 million (Q1 2022: R108 million) and earnings per share 42% to R4.96 million (Q1 2022: R3.49 million).
“Strong free cash flow generation bolstered our robust cash position, notwithstanding our investment in future growth. A net cash and cash equivalents balance of R854 million at the end of Q1 2023 (Q4 2022: R718 million; Q1 2022: R 554 million) supported an interim dividend of 60 US cents per ordinary share, declared on 27 April 2022.”
Looking ahead, Calisto says: “Our ability to create compelling value from the billions of data points we collect continues to improve, differentiating our offering to enterprise customers.
“Underpinned by our evolving end-to-end all-inclusive IOT platform, vertically integrated business model, established infrastructure, expanding distribution network and ability to execute, we believe we have proved we can scale our customer base in varying market conditions."
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