Yusuf Salem, Swvl’s chief financial officer, told Reuters that higher oil prices helped the Dubai-based firm attract more customers; In big markets like Egypt and Pakistan, people leave their cars and board buses.
But the US Nasdaq-listed company has cut costs significantly and halted some expansion plans as it looks to turn a profit next year to appease investors in the face of inflation and high interest rates.
“For us, there are two important consequences of high oil prices and inflation,” Salem said in an interview. One is very positive and the other is very challenging from a capital market perspective.
He added that bookings were up 40% year-on-year in the first quarter of the year; Customers park their cars and use Swvl buses.
But he said the company cut its staff by a third in May while expanding its branches in Jordan, Kenya and Argentina. The company has raised its service prices by 10-20% in the last four months as commodity prices have risen.
Swvl operates an app that connects people with private buses, similar to the Uber taxi app, which offers more flexible schedules and routes than public transit, serving individuals, businesses and schools.
The company’s shares were valued at $1.2 billion on the stock market in April after merging with special purpose firm Queen’s Competitor Growth Capital.
But the stock price lost more than 75% of its value.
“As the cost of borrowing increases, capital available for high-growth stocks becomes more scarce and more expensive,” Salem said.
“We should close any unprofitable market by 2023 and restart it in 2023 instead of using additional capital from the market,” he added.
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