Net1 provides update on EPE accounts court process; expects Q2 2019 loss
31 Januar 2019 - 3:15PM
Net 1 UEPS Technologies, Inc. (“Net1” or the “Company”) today
announced that on January 29, 2019, the High Court of the Republic
of South Africa (Gauteng Division, Pretoria) handed down its final
judgment in the Company’s application to direct SASSA to pay social
grants into the EPE accounts of recipients who had previously made
biometric elections to receive their grants into their EPE
accounts, but had not submitted a SASSA-prescribed form called an
“Annexure C form”. The High Court reversed a portion of its
November 28, 2018 interim order that directed SASSA to pay grants
into the EPE accounts of recipients who made those biometric
elections without submitting the Annexure C form. The effect of the
final judgment is that, while SASSA is required to promptly pay
social grants into EPE accounts of those recipients who have
submitted the Annexure C form electing to have their grants paid
that way, SASSA is not required to pay grants into the EPE accounts
of those recipients who have not submitted the Annexure C form,
despite having provided their previous biometric consent and may
continue to auto-migrate those grants to SAPO accounts. The High
Court did not award costs.
The Company is currently evaluating the options
available to it, including an appeal against the judgment.
“SASSA failed to implement the High Court’s
interim order and pay the social grants for the December, January
or February payment cycles into the EPE accounts for those
customers who have previously been auto-migrated without consent.
Unfortunately, this has had a material adverse impact on our
financial results, and we expect to report a significant loss for
the second quarter of fiscal 2019. This loss arose primarily from
the deployment of our full infrastructure to service current and
new customers during that time, and a substantial increase in our
allowance for doubtful finance loans receivable on loans extended
to our EPE account holder base,” said Herman Kotzé, CEO of Net1.
“Our near-term focus is to ensure that we right-size our South
African operations and get them to a break-even level by Q4 2019.
We remain in a net-cash position, and our non-EPE-related
businesses remain meaningful positive contributors to the
Group.”
About Net1 (www.net1.com)
Net1 is a leading provider of transaction
processing services, financial inclusion products and services and
secure payment technology. Net1 operates market-leading payment
processors in South Africa and the Republic of Korea.
Net1 offers debit, credit and prepaid processing and issuing
services for all major payment networks. In South Africa, Net1
provides innovative low-cost financial inclusion products,
including banking, lending and insurance, and is a leading
distributor of mobile subscriber starter packs for Cell C, a South
African mobile network operator. Net1 leverages its strategic
equity investments in Finbond and Bank Frick (both regulated
banks), and Cell C to introduce products to new customers and
geographies. Net1 has a primary listing on NASDAQ (NasdaqGS: UEPS)
and a secondary listing on the Johannesburg Stock Exchange (JSE:
NT1). Visit www.net1.com for additional information about Net1.
Forward-Looking Statements
This press release contains forward-looking
statements that involve substantial risks and uncertainties. All
statements, other than statements of historical fact, included in
this press release regarding strategy, future operations, future
financial position, future revenues, projected costs, prospects,
plans and objectives of management are forward-looking statements.
The Company may not actually achieve the plans, intentions or
expectations disclosed in its forward-looking statements. Actual
results or events could differ materially from the plans,
intentions and expectations disclosed in the forward-looking
statements that the Company makes. Factors that might cause such
differences include, but are not limited to: obtaining right to
appeal the judgment and the result of such appeal, if right to
appeal is granted; finalization of its second quarter of fiscal
2019 results, as well as other factors, many of which are beyond
the Company’s control; and other important factors included in the
Company’s reports filed with the Securities and Exchange
Commission, particularly in the “Risk Factors” section of the
Company’s Annual Report on Form 10-K for the fiscal year ended June
30, 2018, as such Risk Factors may be updated from time to time in
subsequent reports. The Company does not assume any obligation to
update any forward-looking statements, whether as a result of new
information, future events or otherwise.
Investor Relations
Contact:Dhruv ChopraHead of Investor RelationsPhone:
+1-917-767-6722Email: dchopra@net1.com
Media Relations Contact:Bridget
von HoldtBusiness Director – BCWPhone: +27-82-610-0650Email:
bridget.vonholdt@bm-africa.com
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