Net 1 UEPS Technologies, Inc. (Nasdaq: UEPS; JSE: NT1) today
released results for the fourth fiscal quarter and year ended June
30, 2020.
Q4 2020 Highlights and Recent Developments:
- At June 30, 2020, had unrestricted
cash of $218 million and no debt
- Revenue of $26.0 million, excluding
the impact of the 2019 SASSA implementation fee refund, was down
year-over-year reflecting effects of the COVID-19 pandemic on fees
and financial services;
- GAAP EPS of $(0.68) and Fundamental
EPS of $(0.22); and
- Operating loss of $13.2 million and
adjusted EBITDA loss of $12.2 million.
Strategic Review:
Following completion of the strategic review,
our board has realigned Net1 to focus on, and invest in, its core
competencies and portfolio of assets within the South African
market. We aim to renew Net1 by building on the unique suite of
financial technology products that is the profitable heart of our
business in order, to provide an end-to-end value proposition for
underserved participants in the economy. We believe that Net1 is
extremely well-positioned to be a dynamic, catalyzing and positive
force for our customers, empowering individuals and small
businesses with credit, insurance and payment services.
“South Africa is, and always has been, the
engine room of Net1,” said Alex Smith, Net1’s chief financial
officer. “Following our strategic review, we intend to focus our
incremental capital and management resources to scale up our South
African businesses, and return Net1 to a sustainable, cash
generative business. Efficient capital allocation will drive our
strategy during fiscal 2021 and beyond in order to generate the
best return for the business and for shareholders.”
“Economic activity levels in South Africa remain
challenging due to the ongoing effects of COVID-19, particularly
its wider impact on the macroeconomic environment. We have,
however, begun reinvesting in our South African operations and are
pleased with the demand for our transactional and financial
services since the relaxation of lockdown restrictions in June,” he
added.
Investment Company As previously communicated,
we are in the process of more formally determining our status under
the Investment Company Act. We currently have an authorisation in
place to repurchase up to $100 million of shares, however we will
not be able to use the authorisation unless and until we can
reliably conclude that we will not be considered to be an
investment company. We intend to return excess capital to
shareholders once this matter is resolved.
Succession plan for CEOOn August 5, 2020, we
announced that, after 22 years with our company, Herman G. Kotzé
will be stepping down on September 30, 2020, as Net1’s CEO and
director. Alex Smith will take over as the interim CEO upon Mr.
Kotzé’s departure, until the board finalizes the appointment of a
permanent CEO. To ensure a smooth transition, Mr. Kotzé has agreed
to provide consulting services to Net1 through May 31, 2021.
Summary Financial Metrics
|
|
Q4 2020 |
|
Q4 2019(R) |
|
Q3 2020 |
|
Q4 ’20 vs Q4 ’19 |
|
Q4 ’20 vs Q3 ’20 |
|
Q4 ’20 vs Q4 ’19 |
|
Q4 ’20 vs Q3 ’20 |
(All figures in
USD ‘000s except per share data) |
USD ‘000’s (except per share
data) |
|
% change in USD |
|
% change in ZAR |
Revenue |
25,978 |
|
|
17,053 |
|
|
36,514 |
|
|
52% |
|
(29%) |
|
86% |
|
(20%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
loss |
(13,180 |
) |
|
(52,356 |
) |
|
(14,212 |
) |
|
(75%) |
|
(7%) |
|
(69%) |
|
4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(loss) (1) |
(12,184 |
) |
|
(72,562 |
) |
|
(6,423 |
) |
|
(83%) |
|
90% |
|
(79%) |
|
113% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP (loss)
earnings per share ($) |
(0.68 |
) |
|
(3.22 |
) |
|
(0.61 |
) |
|
(79%) |
|
12% |
|
(74%) |
|
26% |
|
Continuing |
(0.68 |
) |
|
(3.24 |
) |
|
(0.85 |
) |
|
(79%) |
|
(20%) |
|
(74%) |
|
(10%) |
|
Discontinued |
(0.00 |
) |
|
0.02 |
|
|
0.24 |
|
|
nm |
|
nm |
|
nm |
|
nm |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fundamental loss
per share ($)(1) |
(0.22 |
) |
|
(3.05 |
) |
|
(0.11 |
) |
|
(93%) |
|
100% |
|
(91%) |
|
125% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fully-diluted
shares outstanding (‘000’s) |
57,119 |
|
|
56,804 |
|
|
56,568 |
|
|
1% |
|
1% |
|
nm |
|
nm |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average period
USD/ ZAR exchange rate |
17.28 |
|
|
14.13 |
|
|
15.37 |
|
|
22% |
|
12% |
|
nm |
|
nm |
|
|
F2020 |
|
F2019(R) |
|
F2020 vs F2019 |
|
F2020 vs F2019 |
(All figures in
USD ‘000s except per share data) |
USD ‘000’s (except per share
data) |
|
% change in USD |
|
% change in ZAR |
Revenue |
150,997 |
|
|
166,227 |
|
|
(9%) |
|
2% |
|
|
|
|
|
|
|
|
|
GAAP operating
loss |
(44,248 |
) |
|
(134,932 |
) |
|
(67%) |
|
(63%) |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(loss)(1) |
(30,389 |
) |
|
(64,596 |
) |
|
(53%) |
|
(47%) |
|
|
|
|
|
|
|
|
|
GAAP (loss)
earnings per share ($) |
(1.37 |
) |
|
(5.48 |
) |
|
(75%) |
|
(72%) |
|
Continuing |
(1.70 |
) |
|
(5.49 |
) |
|
(69%) |
|
(65%) |
|
Discontinued |
0.33 |
|
|
0.01 |
|
|
nm |
|
nm |
|
|
|
|
|
|
|
|
|
Fundamental loss
per share ($)(1) |
(1.04 |
) |
|
(4.53 |
) |
|
(77%) |
|
(74%) |
|
|
|
|
|
|
|
|
|
Fully-diluted
shares outstanding (‘000’s) |
56,764 |
|
|
56,778 |
|
|
(0%) |
|
nm |
|
|
|
|
|
|
|
|
|
Average period
USD/ ZAR exchange rate |
15.96 |
|
|
14.27 |
|
|
12% |
|
nm |
(R) 2019 restated to correct an error identified
related to the loss recorded related to the disposal of
discontinued operation and to correct errors identified by our
equity method investment – Finbond Group Limited. The financial
information for the three months June 30, 2019, has been restated
with the effect of decreasing GAAP net loss by $0.6 million and
decreasing GAAP loss per share by $0.01, respectively. The
financial information for the year ended June 30, 2019, has been
restated with the effect of increasing GAAP net loss by $3.4
million and increasing GAAP loss per share by $0.06,
respectively
(1) Adjusted EBITDA (loss), fundamental loss and
fundamental loss per share are non-GAAP measures and are described
below under “Use of Non-GAAP Measures—EBITDA and Adjusted EBITDA,
and —Fundamental net (loss) income and fundamental (loss) earnings
per share.” See Attachment B for a reconciliation of GAAP operating
loss to EBITDA (loss) and Adjusted EBITDA (loss), and GAAP net loss
to fundamental net (loss) income and (loss) earnings per share.
Business update related to COVID-19 pandemic
While our business was significantly impacted by
the initial lockdown period from March 27 to May 31, we have since
been able to reopen all of our operations. While we continue to be
affected by the broader macroeconomic conditions that have resulted
from the pandemic, we believe that there are opportunities for us
in providing financial services and exploiting some of the emerging
trends in electronic payment methods and related areas.
The net impact of the lockdown on our results
was an EBITDA loss of ZAR 32.0 million during the fourth quarter.
We were unable to charge approximately ZAR 27.0 million of
withdrawal fees under the pandemic regulations and our
micro-lending and insurance businesses were unable to operate
during the initial lockdown period. We also saw a 10% reduction in
utilisation of our ATMs during this period. The unwinding of the
loan book and the resulting impact on revenue reduced EBITDA by a
further ZAR 22.0 million and we incurred around ZAR 3.0 million of
costs directly related to the pandemic. We were able to partially
offset these reductions through access to approximately ZAR 20.0
million of government relief for the businesses that were unable to
operate.
In June, we saw some recovery with loan advances
picking up strongly and the utilisation of our ATMs returning to
pre-COVID-19 levels, which is encouraging and we are now actively
looking to expand this customer base.
Factors impacting comparability of our
Q4 2020 and Q4 2019 results
- Higher revenue:
Our revenues increased 86% in ZAR primarily due to the impact of
the 2019 SASSA implementation fee reversal, which was partially
offset by lower South African transaction fees, lower ad-hoc
technology sales and lower international processing volumes;
- Ongoing operating
losses: While operating costs have reduced significantly,
we continue to experience operating losses in South Africa and
internationally, as a result of depressed revenues and challenging
trading conditions during the COVID-19 outbreak; and
- Adverse foreign exchange
movements: The U.S. dollar appreciated 22% against the ZAR
compared to Q4 2020, which adversely impacted our reported
results.
Results of Operations by Segment and
Liquidity
South African transaction
processing
Segment revenue was $14.2 million in Q4 2020,
down 9%, compared with Q4 2019 and also down 20% compared to Q3
2020 on a constant currency basis. The decrease in segment revenue
was primarily due to the impact of COVID-19 on our EPE transaction
fees and volumes, as well as the disposal of FIHRST, which were
partially offset by higher fees from other transacting businesses.
Our revenue for Q4 2020 was adversely impacted by ZAR 27.0 million
($1.6 million) as a result of the COVID-19 pandemic as we were
unable to charge certain cash withdrawal fees. The higher operating
loss in the segment is primarily due to the impact of COVID-19 on
our operating activities as discussed above. Our operating loss
margin for Q4 2020 and 2019 was (32.1%) and (13.1%),
respectively.
International transaction
processing
Segment revenue from continuing operations was
$1.4 million in Q4 2020, down 12% on a constant currency basis
compared with Q4 2019 and down from $1.6 million in Q3 2020.
Segment revenue from continuing operations was lower during Q4
2020, primarily due to an ongoing contraction in IPG transaction
volumes. Operating loss from continuing operations during Q4 2020
increased compared with fiscal 2019 due to higher operating losses
incurred by IPG, reflecting the high fixed costs component of the
business. Our operating loss margin for Q4 2020 and 2019 was
(289.6%) and (138.1%), respectively.
Financial inclusion and applied
technologies
Segment revenue was $12.6 million in Q4 2020,
down 13% on a constant currency basis compared with Q4 2020 and
also down from $17.7 million in Q3 2020. Prepaid airtime sales were
also modestly lower than Q4 2019. Operating loss for this operating
segment for Q4 2019 included a goodwill impairment of $6.2 million.
Operating loss for Q4 2020 improved compared with fiscal 2019
primarily due to better utilization of our infrastructure, which
was partially offset by higher fixed costs incurred and includes a
$1.3 million inventory write-down related to Cell C prepaid
airtime. The COVID impact on this segment was not significant due
to government assistance largely offsetting the revenue impact. Our
operating loss margin for the Financial inclusion and applied
technologies segment was (19.3%) and (61.2%) during Q4 2020 and
2019, respectively. Our operating loss margin for Q4 2020 excluding
the $1.3 inventory write-down was (8.9%) and for Q4 2019 excluding
the goodwill impairment was (25.9%), respectively.
Corporate/eliminations
Our corporate expenses decreased primarily due
to the inclusion of the impact of the 2019 SASSA implementation fee
reversal in Q4 2019 and lower acquired intangible asset
amortization expense in Q4 2020 related to intangible assets that
were fully amortized during Q4 2019.
Cash flow and liquidity
At June 30, 2020, our cash and cash equivalents
were $217.7 million, which comprised U.S. dollar-denominated
balances of $171.3 million, ZAR-denominated balances of ZAR 750.9
million ($43.3 million), and other currency deposits, primarily
Botswana pula, of $3.0 million, all amounts translated at exchange
rates applicable as of June 30, 2020. The increase in our
unrestricted cash balances from June 30, 2019, was primarily
due to the sale of our Korean operations, FIHRST and the majority
of our remaining interest in DNI for cash; and the repayment of a
loan outstanding by DNI as of June 30, 2019; which was partially
offset by weak trading activities, payment of a termination fee to
cancel our Bank Frick option, repayment of our short-term
borrowings, capital expenditures, and an additional investment in
V2.
Our cash used in operating activities during Q4
2020 was impacted by the cash losses incurred by the majority of
our continuing operations, the payment of the $17.5 million option
termination fee and the recommencement of lending activities. We
were permitted to commence origination of loans in June following
the relaxation of the temporary COVID-19 restrictions imposed on
our lending activities in March 2020. Capital expenditures for Q4
2020 and 2019 were $1.4 million and $2.1 million, respectively,
with Q4 2020 capital expenditures relating primarily to the
acquisition of point of sale devices in South Africa to deploy to
merchants.
Supplemental presentation for Q4 2020
Results
A supplemental presentation for Q4 2020 will be
posted to the Investor Relations page of our website – ir.net1.com
prior to our earnings call on Friday, September 11, 2020.
Conference Call
We will host a conference call to review these
results on September 11, 2020, at 8:00 a.m. Eastern Time. To
participate in the call, dial 1-508-924-4326 (US and Canada),
0333-300-1418 (U.K. only) or 010-201-6800 (South Africa only) ten
minutes prior to the start of the call. Callers should request
“Net1 call” upon dial-in. The call will also be webcast on the Net1
homepage, www.net1.com. Please click on the webcast link at least
ten minutes prior to the call. A webcast of the call will be
available for replay on the Net1 website through October 4,
2020.
Participants are now able to
pre-register for the September 11, 2020, conference call by
navigating to
www.diamondpass.net/2820008. Participants
utilizing this pre-registration service will receive their dial-in
number upon registration.
Use of Non-GAAP Measures
U.S. securities laws require that when we
publish any non-GAAP measures, we disclose the reason for using
these non-GAAP measures and provide reconciliations to the most
directly comparable GAAP measures. The presentation of EBITDA,
adjusted EBITDA, fundamental net (loss) income and fundamental
(loss) earnings per share and headline (loss) earnings per share
are non-GAAP measures.
EBITDA and adjusted EBITDA
Earnings before interest, tax, depreciation and
amortization (“EBITDA”) is GAAP operating (loss) income adjusted
for depreciation and amortization and, if applicable, impairment
losses. Adjusted EBITDA is EBITDA adjusted for costs related to
acquisitions and transactions consummated or ultimately not
pursued, the accrual of the 2019 SASSA implementation fee reversal
and adjustment related to retrenchment costs paid.
Fundamental net (loss) income and fundamental (loss)
earnings per share
Fundamental net (loss) income and (loss)
earnings per share is GAAP net (loss) income and (loss) earnings
per share adjusted for the amortization of acquisition-related
intangible assets (net of deferred taxes), the amortization of
intangible assets (net of deferred taxes) related to
equity-accounted investments, stock-based compensation charges, and
unusual non-recurring items, including costs related to
acquisitions and transactions consummated or ultimately not
pursued.
Fundamental net (loss) income and (loss)
earnings per share for fiscal 2020 also includes an adjustment for
the termination fee paid to cancel the Bank Frick option,
impairment losses related to our equity-accounted investments, the
gain related to the disposal of Net1 Korea, the gain related to the
disposal of FIHRST, the loss related to the deconsolidation of CPS,
interest related to SASSA implementation costs refund, and fiscal
2019 also includes gain (loss) related to the disposal of DNI, the
accretion of interest related to the DNI contingent consideration,
retrenchment costs (net of taxes), the non-controlling interest
portion of the amortization of intangible assets (net of deferred
taxes), and the amortization of debt facility fees.
Management believes that the EBITDA, adjusted
EBITDA, fundamental net (loss) income and (loss) earnings per share
metric enhances its own evaluation, as well as an investor’s
understanding, of our financial performance. Attachment B presents
the reconciliation between GAAP operating income and EBITDA and
adjusted EBITDA; and GAAP net (loss) income and (loss) earnings per
share and fundamental net (loss) income and (loss) earnings per
share.
Headline (loss) earnings per share
(“H(L)EPS”)
The inclusion of H(L)EPS in this press release
is a requirement of our listing on the JSE. H(L)EPS basic and
diluted is calculated using net (loss) income which has been
determined based on GAAP. Accordingly, this may differ to the
headline (loss) earnings per share calculation of other companies
listed on the JSE as these companies may report their financial
results under a different financial reporting framework, including
but not limited to, International Financial Reporting
Standards.
H(L)EPS basic and diluted is calculated as GAAP
net (loss) income adjusted for the impairment losses related to our
equity-accounted investments, the gain related to the disposal of
Net1 Korea, the gain on disposal of FIHRST, the loss related to the
deconsolidation of CPS, the loss related to the disposal of DNI,
impairment loss and (profit) loss on sale of property, plant and
equipment. Attachment C presents the reconciliation between our net
(loss) income used to calculate (loss) earnings per share basic and
diluted and HE(L)PS basic and diluted and the calculation of the
denominator for headline diluted (loss) earnings per share.
About Net1
Net1 is a multinational financial technology
company with a presence in Africa, Asia and Europe. Net1 leverages
its proprietary banking and payment technology to distribute
low-cost financial and value-added services to underserved
consumers and small businesses. The Company also provides
transaction processing services, including being a leading payment
processor and bill payment platform in South Africa. Net1 leverages
its strategic investments in banks, telecom and mobile payment
technology companies to further expand its product offerings or to
enter new markets.
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 announcement contains forward-looking
statements that involve known and unknown risks and uncertainties.
A discussion of various factors that may cause our actual results,
levels of activity, performance or achievements to differ
materially from those expressed in such forward-looking statements
are included in our filings with the Securities and Exchange
Commission. We undertake no obligation to revise any of these
statements to reflect future events.
Investor Relations Contact:Dhruv ChopraGroup
Vice President, Investor RelationsPhone: +1 917-767-6722Email:
dchopra@net1.com
Media Relations Contact:Bridget von
HoldtBusiness Director – BCWPhone: +27-82-610-0650Email:
Bridget.vonholdt@bcw-global.com
|
|
NET 1 UEPS TECHNOLOGIES, INC. |
Unaudited Condensed Consolidated Statements of
Operations |
|
|
|
Unaudited |
|
(A) |
|
|
|
Three months ended |
|
Year ended |
|
|
|
June 30, |
|
June 30, |
|
|
|
2020 |
|
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
As restated(R) |
|
|
|
As restated(R) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands) |
|
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUE |
|
$ |
25,978 |
|
|
$ |
17,053 |
|
|
$ |
150,997 |
|
|
$ |
166,227 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold, IT processing, servicing and support |
|
|
22,400 |
|
|
|
26,225 |
|
|
|
109,006 |
|
|
|
129,696 |
|
|
Selling, general and
administration |
|
|
15,762 |
|
|
|
33,916 |
|
|
|
75,256 |
|
|
|
144,920 |
|
|
Depreciation and
amortization |
|
|
996 |
|
|
|
3,019 |
|
|
|
4,647 |
|
|
|
12,103 |
|
|
Impairment loss |
|
|
- |
|
|
|
6,249 |
|
|
|
6,336 |
|
|
|
14,440 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
LOSS |
|
|
(13,180 |
) |
|
|
(52,356 |
) |
|
|
(44,248 |
) |
|
|
(134,932 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHANGE IN FAIR
VALUE OF EQUITY SECURITIES |
|
|
- |
|
|
|
(125,360 |
) |
|
|
- |
|
|
|
(167,459 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAIN ON DISPOSAL
OF FIHRST |
|
|
- |
|
|
|
- |
|
|
|
9,743 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(LOSS) GAIN ON
DISPOSAL OF DNI |
|
|
(1,010 |
) |
|
|
177 |
|
|
|
(1,010 |
) |
|
|
177 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS ON
DECONSOLIDATION OF CPS |
|
|
7,148 |
|
|
|
- |
|
|
|
7,148 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TERMINATION FEE
PAID TO BANK FRICK |
|
|
17,517 |
|
|
|
- |
|
|
|
17,517 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST
INCOME |
|
|
790 |
|
|
|
988 |
|
|
|
2,805 |
|
|
|
5,424 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST
EXPENSE |
|
|
1,279 |
|
|
|
1,659 |
|
|
|
7,641 |
|
|
|
9,860 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IMPAIRMENT OF
CEDAR CELLULAR NOTE |
|
|
- |
|
|
|
7,439 |
|
|
|
- |
|
|
|
12,793 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS BEFORE INCOME
TAX EXPENSE (BENEFIT) |
|
|
(39,344 |
) |
|
|
(185,649 |
) |
|
|
(65,016 |
) |
|
|
(319,443 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME TAX EXPENSE
(BENEFIT) |
|
|
339 |
|
|
|
272 |
|
|
|
2,656 |
|
|
|
(5,072 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS BEFORE
LOSS FROM EQUITY-ACCOUNTED INVESTMENTS |
|
|
(39,683 |
) |
|
|
(185,921 |
) |
|
|
(67,672 |
) |
|
|
(314,371 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS FROM
EQUITY-ACCOUNTED INVESTMENTS |
|
|
1,082 |
|
|
|
1,611 |
|
|
|
(29,542 |
) |
|
|
1,258 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS FROM
CONTINUING OPERATIONS |
|
|
(38,601 |
) |
|
|
(184,310 |
) |
|
|
(97,214 |
) |
|
|
(313,113 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME FROM
DISCONTINUED OPERATIONS |
|
|
- |
|
|
|
1,272 |
|
|
|
6,402 |
|
|
|
13,630 |
|
(LOSS) GAIN FROM
DISPOSAL OF DISCONTINUED OPERATION, net of tax |
|
|
(279 |
) |
|
|
- |
|
|
|
12,454 |
|
|
|
(9,175 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS |
|
|
(38,880 |
) |
|
|
(183,038 |
) |
|
|
(78,358 |
) |
|
|
(308,658 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(ADD) LESS NET
(LOSS) INCOME ATTRIBUTABLE TO NON-CONTROLLING INTEREST |
|
|
- |
|
|
|
10 |
|
|
|
- |
|
|
|
2,349 |
|
|
Continuing |
|
|
- |
|
|
|
10 |
|
|
|
- |
|
|
|
(1,352 |
) |
|
Discontinued |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
3,701 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET (LOSS) INCOME
ATTRIBUTABLE TO NET1 |
|
|
(38,880 |
) |
|
|
(183,048 |
) |
|
|
(78,358 |
) |
|
|
(311,007 |
) |
|
Continuing |
|
|
(38,601 |
) |
|
|
(184,320 |
) |
|
|
(97,214 |
) |
|
|
(311,761 |
) |
|
Discontinued |
|
$ |
(279 |
) |
|
$ |
1,272 |
|
|
$ |
18,856 |
|
|
$ |
754 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
earnings per share, in United States dollars: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic (loss)
earnings attributable to Net1 shareholders |
|
$ |
(0.68 |
) |
|
$ |
(3.22 |
) |
|
$ |
(1.37 |
) |
|
$ |
(5.48 |
) |
|
Continuing |
|
$ |
(0.68 |
) |
|
$ |
(3.24 |
) |
|
$ |
(1.70 |
) |
|
$ |
(5.49 |
) |
|
Discontinued |
|
$ |
(0.00 |
) |
|
$ |
0.02 |
|
|
$ |
0.33 |
|
|
$ |
0.01 |
|
Diluted (loss)
earnings attributable to Net1 shareholders |
|
$ |
(0.69 |
) |
|
$ |
(3.27 |
) |
|
$ |
(1.37 |
) |
|
$ |
(5.48 |
) |
|
Continuing |
|
$ |
(0.69 |
) |
|
$ |
(3.29 |
) |
|
$ |
(1.70 |
) |
|
$ |
(5.49 |
) |
|
Discontinued |
|
$ |
(0.00 |
) |
|
$ |
0.02 |
|
|
$ |
0.33 |
|
|
$ |
0.01 |
|
(R) Certain amounts have been restated to correct discontinued
operations presentation, the loss on disposal of discontinued
operation, net of tax, gain on disposal of DNI in 2019 and to
correct errors identified by our equity method investment – Finbond
Group Limited . Refer to Note 1 to Form 10-K for the annual period
ended June 30, 2020.(A) Derived from audited consolidated financial
statements.
|
|
NET 1 UEPS TECHNOLOGIES, INC. |
Unaudited Consolidated Balance Sheets |
|
|
|
|
|
|
(A) |
|
(A) |
|
|
|
|
|
|
June 30, |
|
June 30, |
|
|
|
|
|
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
As restated(R) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands, except share data) |
|
|
|
|
|
ASSETS |
|
|
|
|
|
CURRENT
ASSETS |
|
|
|
|
|
|
Cash and cash
equivalents |
$ |
217,671 |
|
|
$ |
20,014 |
|
|
Restricted
cash |
|
14,814 |
|
|
|
75,446 |
|
|
Accounts
receivable, net of allowance of - 2020: $253; 2019: $661 and other
receivables |
|
43,068 |
|
|
|
31,135 |
|
|
Finance loans
receivable, net of allowance of - 2020: $7,658; 2019: $8,999 |
|
15,879 |
|
|
|
20,981 |
|
|
Inventory |
|
19,860 |
|
|
|
5,709 |
|
|
|
Total current
assets before settlement assets |
|
311,292 |
|
|
|
153,285 |
|
|
|
|
Settlement
assets |
|
8,014 |
|
|
|
24,523 |
|
|
|
|
Current assets of
discontinued operation |
|
- |
|
|
|
117,842 |
|
|
|
|
|
Total current assets |
|
319,306 |
|
|
|
295,650 |
|
PROPERTY, PLANT
AND EQUIPMENT, net of accumulated depreciation of - 2020: $29,524;
2019: $55,427 |
|
6,656 |
|
|
|
8,227 |
|
OPERATING LEASE
RIGHT-OF-USE |
|
5,395 |
|
|
|
- |
|
EQUITY-ACCOUNTED
INVESTMENTS |
|
65,836 |
|
|
|
148,427 |
|
GOODWILL |
|
24,169 |
|
|
|
37,316 |
|
INTANGIBLE ASSETS,
net of accumulated amortization of - 2020: $27,325; 2019:
$37,036 |
|
612 |
|
|
|
2,228 |
|
DEFERRED INCOME
TAXES |
|
358 |
|
|
|
234 |
|
OTHER LONG-TERM
ASSETS, including reinsurance assets |
|
31,346 |
|
|
|
28,775 |
|
LONG-TERM ASSETS
OF DISCONTINUED OPERATION |
|
- |
|
|
|
149,390 |
|
TOTAL
ASSETS |
|
453,678 |
|
|
|
670,247 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
CURRENT
LIABILITIES |
|
|
|
|
|
|
Short-term credit
facilities for ATM funding |
|
14,814 |
|
|
|
75,446 |
|
|
Short-term credit
facilities |
|
- |
|
|
|
9,544 |
|
|
Accounts
payable |
|
6,287 |
|
|
|
9,866 |
|
|
Other
payables |
|
23,779 |
|
|
|
59,622 |
|
|
Operating lease
right of use lease liability - current |
|
2,251 |
|
|
|
- |
|
|
Income taxes
payable |
|
16,157 |
|
|
|
1,330 |
|
|
|
Total current
liabilities before settlement obligations |
|
63,288 |
|
|
|
155,808 |
|
|
|
|
Settlement
obligations |
|
8,015 |
|
|
|
24,523 |
|
|
|
|
Settlement
obligations |
|
- |
|
|
|
57,815 |
|
|
|
|
|
Total current
liabilities |
|
71,303 |
|
|
|
238,146 |
|
DEFERRED INCOME
TAXES |
|
1,859 |
|
|
|
1,324 |
|
RIGHT-OF-USE
OPERATING LEASE LIABILITY - LONG TERM |
|
3,312 |
|
|
|
- |
|
OTHER LONG-TERM
LIABILITIES, including insurance policy liabilities |
|
2,012 |
|
|
|
2,499 |
|
LONG-TERM
LIABILTIES OF DISCONTINUED OPERATION |
|
- |
|
|
|
3,264 |
|
TOTAL
LIABILITIES |
|
78,486 |
|
|
|
245,233 |
|
COMMITMENTS AND
CONTINGENCIES |
|
- |
|
|
|
- |
|
REDEEMABLE COMMON
STOCK |
|
84,979 |
|
|
|
107,672 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY |
|
|
|
|
|
NET1 EQUITY: |
|
|
|
|
|
COMMON STOCK |
|
|
|
|
|
|
Authorized:
200,000,000 with $0.001 par value; |
|
|
|
|
|
|
Issued and
outstanding shares, net of treasury: 2020: $57,118,925; 2019:
$56,568,425 |
|
80 |
|
|
|
80 |
|
|
|
|
|
|
|
|
|
|
|
|
PREFERRED
STOCK |
|
|
|
|
|
|
Authorized shares:
50,000,000 with $0.001 par value; |
|
|
|
|
|
|
Issued and
outstanding shares, net of treasury: 2020: -; 2019: - |
|
- |
|
|
|
- |
|
ADDITIONAL
PAID-IN-CAPITAL |
|
301,489 |
|
|
|
276,997 |
|
TREASURY SHARES,
AT COST: 2020: $24,891,292; 2019: $24,891,292 |
|
(286,951 |
) |
|
|
(286,951 |
) |
ACCUMULATED OTHER
COMPREHENSIVE LOSS |
|
(169,075 |
) |
|
|
(195,812 |
) |
RETAINED
EARNINGS |
|
444,670 |
|
|
|
523,028 |
|
TOTAL NET1
EQUITY |
|
290,213 |
|
|
|
317,342 |
|
NON-CONTROLLING
INTEREST |
|
- |
|
|
|
- |
|
TOTAL
EQUITY |
|
290,213 |
|
|
|
317,342 |
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES, REDEEMABLE COMMON STOCK AND SHAREHOLDERS’
EQUITY |
$ |
453,678 |
|
|
$ |
670,247 |
|
(R) Certain amounts have been restated to correct the retained
earnings and accumulated other comprehensive loss, and to correct
errors identified by our equity method investment – Finbond Group
Limited . Refer to Note 1 to Form 10-K for the annual period ended
June 30, 2020.(A) Derived from audited consolidated financial
statements.
|
|
NET 1 UEPS TECHNOLOGIES, INC. |
Unaudited Condensed Consolidated Statements of Cash
Flows |
|
|
|
Unaudited |
|
(A) |
|
|
|
Three months ended |
|
Year ended |
|
|
|
June 30, |
|
June 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
As restated(R) |
|
|
|
As restated(R) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands) |
|
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows
from operating activities |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(38,880 |
) |
|
$ |
(183,038 |
) |
|
$ |
(78,358 |
) |
|
$ |
(308,658 |
) |
|
Depreciation and
amortization |
|
996 |
|
|
|
6,821 |
|
|
|
13,299 |
|
|
|
37,349 |
|
|
Impairment
loss |
|
- |
|
|
|
6,249 |
|
|
|
6,336 |
|
|
|
19,745 |
|
|
Movement in
allowance for doubtful accounts receivable |
|
383 |
|
|
|
8,432 |
|
|
|
743 |
|
|
|
32,786 |
|
|
Loss from
equity-accounted investments |
|
(1,082 |
) |
|
|
(1,611 |
) |
|
|
29,542 |
|
|
|
(1,273 |
) |
|
Movement in
allowance for doubtful loans |
|
316 |
|
|
|
- |
|
|
|
1,035 |
|
|
|
- |
|
|
Inventory net
realizable value adjustment |
|
1,298 |
|
|
|
- |
|
|
|
1,298 |
|
|
|
- |
|
|
Interest on Cedar
Cellular note |
|
- |
|
|
|
(447 |
) |
|
|
- |
|
|
|
(2,397 |
) |
|
Impairment of
Cedar Cellular note |
|
- |
|
|
|
7,439 |
|
|
|
- |
|
|
|
12,793 |
|
|
Change in fair
value of equity securities |
|
- |
|
|
|
125,360 |
|
|
|
- |
|
|
|
167,459 |
|
|
Implementation
costs to be refunded to SASSA |
|
- |
|
|
|
34,039 |
|
|
|
- |
|
|
|
34,039 |
|
|
Fair value
adjustment related to financial liabilities |
|
413 |
|
|
|
(18 |
) |
|
|
(340 |
) |
|
|
73 |
|
|
Interest
payable |
|
3 |
|
|
|
(57 |
) |
|
|
1,758 |
|
|
|
237 |
|
|
Facility fee
amortized |
|
- |
|
|
|
115 |
|
|
|
- |
|
|
|
321 |
|
|
Loss (Gain) on
disposal of Net1 Korea |
|
279 |
|
|
|
- |
|
|
|
(12,454 |
) |
|
|
9,175 |
|
|
Gain on disposal
of FIHRST |
|
- |
|
|
|
- |
|
|
|
(9,743 |
) |
|
|
- |
|
|
Loss on
deconsolidation of CPS |
|
7,148 |
|
|
|
- |
|
|
|
7,148 |
|
|
|
- |
|
|
Loss (Gain) on
disposal of DNI |
|
1,010 |
|
|
|
(177 |
) |
|
|
1,010 |
|
|
|
(177 |
) |
|
Loss (Profit) on
disposal of property, plant and equipment |
|
(32 |
) |
|
|
(73 |
) |
|
|
(127 |
) |
|
|
(486 |
) |
|
Stock-based
compensation charge |
|
558 |
|
|
|
(1,279 |
) |
|
|
1,728 |
|
|
|
393 |
|
|
Dividends received
from equity accounted investments |
|
1,424 |
|
|
|
864 |
|
|
|
3,549 |
|
|
|
1,318 |
|
|
Decrease
(Increase) in accounts receivable, pre-funded social welfare grants
receivable and finance loans receivable |
|
(4,879 |
) |
|
|
(2,154 |
) |
|
|
8,818 |
|
|
|
11,663 |
|
|
(Increase)
Decrease in inventory |
|
(1,292 |
) |
|
|
430 |
|
|
|
(19,328 |
) |
|
|
4,042 |
|
|
(Decrease)
Increase in accounts payable and other payables |
|
4,521 |
|
|
|
(3,199 |
) |
|
|
(139 |
) |
|
|
(14,538 |
) |
|
(Decrease)
Increase in taxes payable |
|
(340 |
) |
|
|
1,286 |
|
|
|
(1,427 |
) |
|
|
3,428 |
|
|
Decrease in
deferred taxes |
|
225 |
|
|
|
(529 |
) |
|
|
(393 |
) |
|
|
(11,752 |
) |
|
|
Net cash used in operating activities |
|
(27,931 |
) |
|
|
(1,547 |
) |
|
|
(46,045 |
) |
|
|
(4,460 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows
from investing activities |
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures |
|
(1,445 |
) |
|
|
(2,136 |
) |
|
|
(5,938 |
) |
|
|
(9,416 |
) |
Proceeds from
disposal of property, plant and equipment |
|
216 |
|
|
|
264 |
|
|
|
578 |
|
|
|
1,045 |
|
Proceeds from
disposal of Net1 Korea, net of cash disposed |
|
- |
|
|
|
- |
|
|
|
192,619 |
|
|
|
- |
|
Transaction costs
paid related to disposal of Net1 Korea |
|
- |
|
|
|
- |
|
|
|
(7,458 |
) |
|
|
- |
|
Proceeds from
disposal of DNI as equity-accounted investment |
|
42,477 |
|
|
|
- |
|
|
|
42,477 |
|
|
|
- |
|
Transaction costs
paid related to disposal of DNI as equity-accounted investment |
|
(1,010 |
) |
|
|
- |
|
|
|
(1,010 |
) |
|
|
- |
|
Proceeds from
disposal of subsidiaries, net of cash disposed |
|
- |
|
|
|
- |
|
|
|
10,895 |
|
|
|
(2,114 |
) |
Deconsolidation of
CPS - cash disposed |
|
(328 |
) |
|
|
- |
|
|
|
(328 |
) |
|
|
- |
|
Investment in
equity-accounted investments |
|
- |
|
|
|
- |
|
|
|
(2,500 |
) |
|
|
(2,989 |
) |
Loan to
equity-accounted investment |
|
(519 |
) |
|
|
- |
|
|
|
(1,230 |
) |
|
|
- |
|
Repayment of loans
by equity-accounted investments |
|
- |
|
|
|
1,029 |
|
|
|
4,268 |
|
|
|
1,029 |
|
Acquisition of
intangible assets |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1,384 |
) |
Investment in
MobiKwik |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1,056 |
) |
Return on
investment |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
284 |
|
Net change in
settlement assets |
|
18 |
|
|
|
2,198 |
|
|
|
(9,256 |
) |
|
|
79,077 |
|
|
Net cash
used in investing activities |
|
39,409 |
|
|
|
1,355 |
|
|
|
223,117 |
|
|
|
64,476 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows
from financing activities |
|
|
|
|
|
|
|
|
|
|
|
Proceeds from bank
overdraft |
|
104,490 |
|
|
|
238,229 |
|
|
|
689,763 |
|
|
|
822,754 |
|
Repayment of bank
overdraft |
|
(142,682 |
) |
|
|
(238,146 |
) |
|
|
(747,935 |
) |
|
|
(740,969 |
) |
Long-term
borrowings utilized |
|
- |
|
|
|
- |
|
|
|
14,798 |
|
|
|
14,613 |
|
Repayment of
long-term borrowings |
|
(3,190 |
) |
|
|
(1,047 |
) |
|
|
(14,503 |
) |
|
|
(37,357 |
) |
Guarantee fee |
|
- |
|
|
|
- |
|
|
|
(148 |
) |
|
|
(394 |
) |
Finance lease
capital repayments |
|
- |
|
|
|
- |
|
|
|
(69 |
) |
|
|
- |
|
Acquisition of
non-controlling interests |
|
- |
|
|
|
(180 |
) |
|
|
- |
|
|
|
(180 |
) |
Dividends paid to
non-controlling interest |
|
- |
|
|
|
(19 |
) |
|
|
- |
|
|
|
(4,104 |
) |
Net change in
settlement obligations |
|
(18 |
) |
|
|
(2,198 |
) |
|
|
9,256 |
|
|
|
(79,077 |
) |
|
Net cash
(used in) provided by financing activities |
|
(41,400 |
) |
|
|
(3,361 |
) |
|
|
(48,838 |
) |
|
|
(24,714 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash |
|
1,747 |
|
|
|
2,126 |
|
|
|
(17,260 |
) |
|
|
(3,845 |
) |
Net
increase (decrease) in cash, cash equivalents and restricted
cash |
|
(28,175 |
) |
|
|
(1,427 |
) |
|
|
110,974 |
|
|
|
31,457 |
|
Cash, cash
equivalents and restricted cash – beginning of period |
|
260,660 |
|
|
|
122,938 |
|
|
|
121,511 |
|
|
|
90,054 |
|
Cash, cash
equivalents and restricted cash – end of period |
$ |
232,485 |
|
|
$ |
121,511 |
|
|
$ |
232,485 |
|
|
$ |
121,511 |
|
(R) Certain amounts have been restated to correct net loss and
loss on disposal of DNI, and to correct errors identified by our
equity method investment – Finbond Group Limited . Refer to Note 1
to Form 10-K for the annual period ended June 30, 2020.(A) Derived
from audited consolidated financial statements.
Net 1 UEPS Technologies, Inc.
Attachment A
Operating segment revenue, operating
(loss) income and operating (loss) margin:
Three months ended June 30, 2020 and
2019 and March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change - actual |
Change – constant exchange rate(1) |
Key segmental data, in ’000, except margins |
|
|
Q4 '20 |
|
|
Q4 '19 |
|
|
Q3 '20 |
Q4 '20 vs Q4
'19 |
Q4 '20 vs Q3
'20 |
Q4 '20 vs Q4
'19 |
Q4 '20 vs Q3
'20 |
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South African
transaction processing |
|
$ |
14,164 |
|
|
$ |
18,945 |
|
|
$ |
19,883 |
|
(25%) |
(29%) |
(9%) |
(20%) |
|
International
transaction processing |
|
|
1,428 |
|
|
|
36,399 |
|
|
|
20,608 |
|
(96%) |
(93%) |
(95%) |
(92%) |
|
|
Continuing |
|
|
1,428 |
|
|
|
1,980 |
|
|
|
1,564 |
|
(28%) |
(9%) |
(12%) |
3% |
|
|
Discontinued |
|
|
- |
|
|
|
34,419 |
|
|
|
19,044 |
|
nm |
nm |
nm |
nm |
|
Financial
inclusion and applied technologies |
|
|
12,560 |
|
|
|
17,573 |
|
|
|
17,651 |
|
(29%) |
(29%) |
(13%) |
(20%) |
|
|
Continuing |
|
|
12,560 |
|
|
|
17,573 |
|
|
|
17,651 |
|
(29%) |
(29%) |
(13%) |
(20%) |
|
|
|
Subtotal:
Operating segments |
|
|
28,152 |
|
|
|
72,917 |
|
|
|
58,142 |
|
(61%) |
(52%) |
(53%) |
(46%) |
|
|
|
Intersegment
eliminations |
|
|
(2,174 |
) |
|
|
(21,445 |
) |
|
|
(2,584 |
) |
(90%) |
(16%) |
(88%) |
(5%) |
|
|
|
|
Consolidated revenue |
|
|
25,978 |
|
|
|
51,472 |
|
|
|
55,558 |
|
(50%) |
(53%) |
(38%) |
(47%) |
|
|
|
|
|
Continuing |
|
|
25,978 |
|
|
|
17,053 |
|
|
|
36,514 |
|
52% |
(29%) |
86% |
(20%) |
|
|
|
|
|
Discontinued |
|
$ |
- |
|
|
$ |
34,419 |
|
|
$ |
19,044 |
|
nm |
nm |
nm |
nm |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
(loss) income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South African
transaction processing |
|
$ |
(4,541 |
) |
|
$ |
(2,474 |
) |
|
$ |
(8,668 |
) |
84% |
(48%) |
125% |
(41%) |
|
International
transaction processing |
|
|
(4,135 |
) |
|
|
2,209 |
|
|
|
(415 |
) |
nm |
896% |
nm |
1,020% |
|
|
Continuing |
|
|
(4,135 |
) |
|
|
(2,734 |
) |
|
|
(3,168 |
) |
51% |
31% |
85% |
47% |
|
|
Discontinued |
|
|
- |
|
|
|
4,943 |
|
|
|
2,753 |
|
nm |
nm |
nm |
nm |
|
Financial
inclusion and applied technologies |
|
|
(2,419 |
) |
|
|
(10,749 |
) |
|
|
(927 |
) |
(77%) |
161% |
(72%) |
193% |
|
|
Continuing |
|
|
(2,419 |
) |
|
|
(10,749 |
) |
|
|
(927 |
) |
(77%) |
161% |
(72%) |
193% |
|
|
|
Subtotal:
Operating segments |
|
|
(11,095 |
) |
|
|
(11,014 |
) |
|
|
(10,010 |
) |
1% |
11% |
23% |
25% |
|
|
|
Corporate/Eliminations |
|
|
(2,085 |
) |
|
|
(38,632 |
) |
|
|
(2,686 |
) |
(95%) |
(22%) |
(93%) |
(13%) |
|
|
|
|
Continuing |
|
|
(2,085 |
) |
|
|
(36,399 |
) |
|
|
(1,449 |
) |
(94%) |
44% |
(93%) |
62% |
|
|
|
|
Discontinued |
|
|
- |
|
|
|
(2,233 |
) |
|
|
(1,237 |
) |
nm |
nm |
nm |
nm |
|
|
|
|
|
Consolidated operating (loss) income |
|
|
(13,180 |
) |
|
|
(49,646 |
) |
|
|
(12,696 |
) |
(73%) |
4% |
(68%) |
17% |
|
|
|
|
|
|
Continuing |
|
|
(13,180 |
) |
|
|
(52,356 |
) |
|
|
(14,212 |
) |
(75%) |
(7%) |
(69%) |
4% |
|
|
|
|
|
|
Discontinued |
|
$ |
- |
|
|
$ |
2,710 |
|
|
$ |
1,516 |
|
nm |
nm |
nm |
nm |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
(loss) income margin (%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South African
transaction processing |
|
|
(32.1 |
%) |
|
|
(13.1 |
%) |
|
|
(43.6 |
%) |
|
|
|
|
|
International
transaction processing |
|
|
(289.6 |
%) |
|
|
6.1 |
% |
|
|
(2.0 |
%) |
|
|
|
|
|
|
Continuing |
|
|
(289.6 |
%) |
|
|
(138.1 |
%) |
|
|
(202.6 |
%) |
|
|
|
|
|
|
Discontinued |
|
|
nm |
|
|
14.4 |
% |
|
|
14.5 |
% |
|
|
|
|
|
Financial
inclusion and applied technologies |
|
|
(19.3 |
%) |
|
|
(61.2 |
%) |
|
|
(5.3 |
%) |
|
|
|
|
|
|
Continuing |
|
|
(19.3 |
%) |
|
|
(61.2 |
%) |
|
|
(5.3 |
%) |
|
|
|
|
|
|
Discontinued |
|
|
nm |
|
|
nm |
|
|
nm |
|
|
|
|
|
|
|
Consolidated operating margin |
|
|
(50.7 |
%) |
|
|
(96.5 |
%) |
|
|
(22.9 |
%) |
|
|
|
|
|
|
|
|
Continuing |
|
|
(50.7 |
%) |
|
|
(307.0 |
%) |
|
|
(38.9 |
%) |
|
|
|
|
|
|
|
|
Discontinued |
|
|
nm |
|
|
7.9 |
% |
|
|
8.0 |
% |
|
|
|
|
(1) – This information shows
what the change in these items would have been if the USD/ ZAR
exchange rate that prevailed during Q4 2020 also prevailed during
Q4 2019 and Q3 2020.
Year ended June 30, 2020 and
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change - actual |
Change – constant exchange rate(1) |
Key segmental data, in ’000, except margins |
|
|
F2020 |
|
|
F2019 |
|
F2020 vsF2019 |
F2020
vs F2019 |
Revenue: |
|
|
|
|
|
|
|
|
|
|
South African
transaction processing |
|
$ |
73,796 |
|
|
$ |
96,038 |
|
|
(23 |
%) |
(5 |
%) |
|
International
transaction processing |
|
|
90,416 |
|
|
|
148,268 |
|
|
(39 |
%) |
(25 |
%) |
|
|
Continuing |
|
|
5,041 |
|
|
|
9,842 |
|
|
(49 |
%) |
(37 |
%) |
|
|
Discontinued |
|
|
85,375 |
|
|
|
138,426 |
|
|
(38 |
%) |
(24 |
%) |
|
Financial
inclusion and applied technologies |
|
|
82,342 |
|
|
|
146,184 |
|
|
(44 |
%) |
(31 |
%) |
|
|
Continuing |
|
|
82,342 |
|
|
|
89,847 |
|
|
(8 |
%) |
13 |
% |
|
|
Discontinued |
|
|
- |
|
|
|
56,337 |
|
|
nm |
nm |
|
|
|
Subtotal:
Operating segments |
|
|
246,554 |
|
|
|
390,490 |
|
|
(37 |
%) |
(22 |
%) |
|
|
|
Intersegment
eliminations |
|
|
(10,182 |
) |
|
|
(29,500 |
) |
|
(65 |
%) |
(58 |
%) |
|
|
|
|
Consolidated revenue |
|
|
236,372 |
|
|
|
360,990 |
|
|
(35 |
%) |
(19 |
%) |
|
|
|
|
|
Continuing |
|
|
150,997 |
|
|
|
166,227 |
|
|
(9 |
%) |
12 |
% |
|
|
|
|
|
Discontinued |
|
$ |
85,375 |
|
|
$ |
194,763 |
|
|
(56 |
%) |
(46 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
(loss) income: |
|
|
|
|
|
|
|
|
|
|
South African
transaction processing |
|
$ |
(19,575 |
) |
|
$ |
(30,771 |
) |
|
(36 |
%) |
(22 |
%) |
|
International
transaction processing |
|
|
2,051 |
|
|
|
2,837 |
|
|
(28 |
%) |
(11 |
%) |
|
|
Continuing |
|
|
(12,517 |
) |
|
|
(16,502 |
) |
|
(24 |
%) |
(7 |
%) |
|
|
Discontinued |
|
|
14,568 |
|
|
|
19,339 |
|
|
(25 |
%) |
(7 |
%) |
|
Financial
inclusion and applied technologies |
|
|
(2,723 |
) |
|
|
(14,758 |
) |
|
(82 |
%) |
(77 |
%) |
|
|
Continuing |
|
|
(2,723 |
) |
|
|
(39,158 |
) |
|
(93 |
%) |
(91 |
%) |
|
|
Discontinued |
|
|
- |
|
|
|
24,400 |
|
|
nm |
nm |
|
|
|
Subtotal:
Operating segments |
|
|
(20,247 |
) |
|
|
(42,692 |
) |
|
(53 |
%) |
(42 |
%) |
|
|
|
Corporate/Eliminations |
|
|
(15,217 |
) |
|
|
(70,816 |
) |
|
(79 |
%) |
(74 |
%) |
|
|
|
|
Continuing |
|
|
(9,433 |
) |
|
|
(48,501 |
) |
|
(81 |
%) |
(76 |
%) |
|
|
|
|
Discontinued |
|
|
(5,784 |
) |
|
|
(22,315 |
) |
|
(74 |
%) |
(68 |
%) |
|
|
|
|
|
Consolidated operating (loss) income |
|
|
(35,464 |
) |
|
|
(113,508 |
) |
|
(69 |
%) |
(62 |
%) |
|
|
|
|
|
|
Continuing |
|
|
(44,248 |
) |
|
|
(134,932 |
) |
|
(67 |
%) |
(60 |
%) |
|
|
|
|
|
|
Discontinued |
|
$ |
8,784 |
|
|
$ |
21,424 |
|
|
(59 |
%) |
(50 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
(loss) income margin (%) |
|
|
|
|
|
|
|
|
|
|
South African
transaction processing |
|
|
(26.5 |
%) |
|
|
(32.0 |
%) |
|
|
|
|
International
transaction processing |
|
|
2.3 |
% |
|
|
1.9 |
% |
|
|
|
|
|
Continuing |
|
|
(248.3 |
%) |
|
|
(167.7 |
%) |
|
|
|
|
|
Discontinued |
|
|
17.1 |
% |
|
|
14.0 |
% |
|
|
|
|
Financial
inclusion and applied technologies |
|
|
(3.3 |
%) |
|
|
(10.1 |
%) |
|
|
|
|
|
Continuing |
|
|
(3.3 |
%) |
|
|
(43.6 |
%) |
|
|
|
|
|
Discontinued |
|
|
nm |
|
|
43.3 |
% |
|
|
|
|
|
|
Consolidated operating margin |
|
|
(15.0 |
%) |
|
|
(31.4 |
%) |
|
|
|
|
|
|
|
Continuing |
|
|
(29.3 |
%) |
|
|
(81.2 |
%) |
|
|
|
|
|
|
|
Discontinued |
|
|
10.3 |
% |
|
|
11.0 |
% |
|
|
|
(1) – This information shows
what the change in these items would have been if the USD/ ZAR
exchange rate that prevailed during fiscal 2020 also prevailed
during fiscal 2019.
Earnings (Loss) from equity-accounted
investments:
The table below presents the relative earnings
(loss) from our equity-accounted investments:
|
|
|
Q4 2020 |
|
|
Q4 2019(R) |
|
% change |
|
|
F2020 |
|
|
F2019(R) |
|
% change |
Bank Frick |
$ |
651 |
|
|
$ |
353 |
|
|
84 |
% |
|
$ |
(17,273 |
) |
|
$ |
(1,542 |
) |
|
1,020 |
% |
|
Share of net income |
|
651 |
|
|
|
493 |
|
|
32 |
% |
|
|
1,421 |
|
|
|
1,109 |
|
|
28 |
% |
|
Amortization of intangible
assets, net of deferred tax |
|
- |
|
|
|
(140 |
) |
|
nm |
|
|
|
(433 |
) |
|
|
(567 |
) |
|
(24 |
%) |
|
Impairment |
|
- |
|
|
|
- |
|
|
nm |
|
|
|
(18,261 |
) |
|
|
- |
|
|
nm |
|
|
Other |
|
- |
|
|
|
- |
|
|
nm |
|
|
|
- |
|
|
|
(2,084 |
) |
|
nm |
|
DNI(1) |
|
- |
|
|
|
865 |
|
|
nm |
|
|
|
(9,744 |
) |
|
|
865 |
|
|
nm |
|
|
Share of net income |
|
- |
|
|
|
1,380 |
|
|
nm |
|
|
|
4,676 |
|
|
|
1,380 |
|
|
239 |
% |
|
Amortization of intangible
assets, net of deferred tax |
|
- |
|
|
|
(515 |
) |
|
nm |
|
|
|
(1,350 |
) |
|
|
(515 |
) |
|
162 |
% |
|
Impairment |
|
- |
|
|
|
- |
|
|
nm |
|
|
|
(13,070 |
) |
|
|
- |
|
|
nm |
|
Finbond |
|
1,349 |
|
|
|
744 |
|
|
81 |
% |
|
|
1,840 |
|
|
|
2,619 |
|
|
(30 |
%) |
Other |
|
(918 |
) |
|
|
(351 |
) |
|
162 |
% |
|
|
(4,365 |
) |
|
|
(684 |
) |
|
538 |
% |
|
Share of net loss |
|
(918 |
) |
|
|
(351 |
) |
|
162 |
% |
|
|
(1,865 |
) |
|
|
(684 |
) |
|
173 |
% |
|
Impairment |
|
- |
|
|
|
- |
|
|
nm |
|
|
|
(2,500 |
) |
|
|
- |
|
|
nm |
|
|
Loss from
equity-accounted investments |
$ |
1,082 |
|
|
$ |
1,611 |
|
|
(33 |
%) |
|
$ |
(29,542 |
) |
|
$ |
1,258 |
|
|
nm |
|
(R) Certain amounts have been restated to
correct errors identified by our equity method investment – Finbond
Group Limited . Refer to Note 1 to Form 10-K for the annual period
ended June 30, 2020.(1) DNI was included as an equity-accounted
investment from August 1, 2017 until June 30, 2018, the date upon
which we obtained control and commenced consolidation of DNI, and
then again from March 31, 2019 to March 31,2020. While DNI was
consolidated it was included in our Financial inclusion and applied
technologies operating segment from the acquisition date.
Net 1 UEPS Technologies,
Inc.
Attachment B
Reconciliation of GAAP operating loss to
EBITDA loss and adjusted EBITDA loss:
Three months and year ended June 30,
2020 and 2019
|
|
|
|
|
Three months ended June 30, |
|
Year ended June 30, |
|
|
|
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
Operating
loss - GAAP |
$ |
(13,180 |
) |
|
$ |
(134,932 |
) |
|
$ |
(44,248 |
) |
|
$ |
(134,932 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization |
|
996 |
|
|
|
12,103 |
|
|
|
4,647 |
|
|
|
12,103 |
|
|
Impairment
loss |
|
- |
|
|
|
14,440 |
|
|
|
6,336 |
|
|
|
14,440 |
|
|
|
Negative
EBITDA |
|
(12,184 |
) |
|
|
(108,389 |
) |
|
|
(33,265 |
) |
|
|
(108,389 |
) |
|
|
|
Accrual of
implementation costs to be refunded to SASSA |
|
- |
|
|
|
34,039 |
|
|
|
- |
|
|
|
34,039 |
|
|
|
|
Retrenchments
costs |
|
- |
|
|
|
1,026 |
|
|
|
- |
|
|
|
6,269 |
|
|
|
|
Transaction
costs |
|
- |
|
|
|
762 |
|
|
|
2,876 |
|
|
|
3,485 |
|
|
|
|
|
Adjusted EBITDA
(loss) |
$ |
(12,184 |
) |
|
$ |
(72,562 |
) |
|
$ |
(30,389 |
) |
|
$ |
(64,596 |
) |
Reconciliation of GAAP net loss and loss
per share, basic, to fundamental net loss and loss per share,
basic:
Three months ended June 30, 2020 and
2019
|
|
Net (loss) income(USD '000) |
|
(L)PS, basic (USD) |
|
Net (loss) income(ZAR '000) |
|
(L)PS, basic (ZAR) |
|
|
2020 |
|
2019 |
|
2020 |
|
|
2019 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
GAAP |
|
(38,880 |
) |
|
(183,048 |
) |
|
(0.68 |
) |
|
(3.22 |
) |
|
(671,886 |
) |
|
(2,615,462 |
) |
|
(11.76 |
) |
|
(46.04 |
) |
Termination fee paid to cancel
Bank Frick |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
option |
|
17,517 |
|
|
- |
|
|
|
|
|
|
302,711 |
|
|
- |
|
|
|
|
|
Loss on deconsolidation of
CPS |
|
7,148 |
|
|
- |
|
|
|
|
|
|
123,525 |
|
|
- |
|
|
|
|
|
Loss on disposal of DNI |
|
1,010 |
|
|
(177 |
) |
|
|
|
|
|
17,454 |
|
|
(2,529 |
) |
|
|
|
|
Impairment loss |
|
- |
|
|
6,249 |
|
|
|
|
|
|
- |
|
|
89,288 |
|
|
|
|
|
Intangible asset amortization,
net |
|
58 |
|
|
2,785 |
|
|
|
|
|
|
990 |
|
|
39,807 |
|
|
|
|
|
Intangible asset amortization,
net related to equity accounted investments |
|
- |
|
|
655 |
|
|
|
|
|
|
- |
|
|
9,359 |
|
|
|
|
|
Interest related to SASSA
implementation costs refund |
|
298 |
|
|
- |
|
|
|
|
|
|
5,156 |
|
|
- |
|
|
|
|
|
Stock-based compensation
charge |
|
558 |
|
|
(1,370 |
) |
|
|
|
|
|
9,643 |
|
|
(19,575 |
) |
|
|
|
|
Transaction costs |
|
- |
|
|
762 |
|
|
|
|
|
|
- |
|
|
10,888 |
|
|
|
|
|
Retrenchment costs, net of
tax |
|
- |
|
|
739 |
|
|
|
|
|
|
- |
|
|
10,621 |
|
|
|
|
|
Facility fees for debt |
|
- |
|
|
115 |
|
|
|
|
|
|
- |
|
|
1,643 |
|
|
|
|
|
Fundamental |
|
(12,291 |
) |
|
(173,290 |
) |
|
(0.22 |
) |
|
(3.05 |
) |
|
(212,407 |
) |
|
(2,475,960 |
) |
|
(3.72 |
) |
|
(43.59 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended June 30, 2020 and 2019
|
|
Net Income (USD '000) |
|
(L) EPS, basic (USD) |
|
Net Income (ZAR '000) |
|
(L)EPS, basic (ZAR) |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
GAAP |
|
(78,358 |
) |
|
(311,007 |
) |
|
(1.38 |
) |
|
(5.48 |
) |
|
(1,376,640 |
) |
|
(4,437,914 |
) |
|
(24.25 |
) |
|
(78.19 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of equity method
investments |
|
32,084 |
|
|
- |
|
|
|
|
|
|
563,672 |
|
|
- |
|
|
|
|
|
Termination fee paid to cancel
Bank Frick option |
|
(17,517 |
) |
|
- |
|
|
|
|
|
|
(307,749 |
) |
|
- |
|
|
|
|
|
(Gain) Loss on discontinued
operation |
|
(12,454 |
) |
|
9,175 |
|
|
|
|
|
|
(218,799 |
) |
|
130,923 |
|
|
|
|
|
Gain on disposal of
FIHRST |
|
(9,743 |
) |
|
- |
|
|
|
|
|
|
(171,171 |
) |
|
- |
|
|
|
|
|
Loss on deconsolidation of
CPS |
|
7,148 |
|
|
- |
|
|
|
|
|
|
125,580 |
|
|
- |
|
|
|
|
|
Impairment loss |
|
6,336 |
|
|
19,745 |
|
|
|
|
|
|
111,314 |
|
|
281,751 |
|
|
|
|
|
Intangible asset amortization,
net |
|
3,805 |
|
|
16,290 |
|
|
|
|
|
|
66,835 |
|
|
232,452 |
|
|
|
|
|
Transaction costs |
|
2,876 |
|
|
3,485 |
|
|
|
|
|
|
50,527 |
|
|
49,727 |
|
|
|
|
|
Intangible asset amortization,
net related to equity accounted investments |
|
1,783 |
|
|
1,082 |
|
|
|
|
|
|
31,325 |
|
|
15,439 |
|
|
|
|
|
Interest related to SASSA
implementation costs refund |
|
1,361 |
|
|
- |
|
|
|
|
|
|
23,909 |
|
|
- |
|
|
|
|
|
Stock-based compensation
charge |
|
2,607 |
|
|
393 |
|
|
|
|
|
|
45,801 |
|
|
5,608 |
|
|
|
|
|
Loss on disposal of DNI |
|
1,010 |
|
|
(177 |
) |
|
|
|
|
|
17,744 |
|
|
(2,526 |
) |
|
|
|
|
Retrenchment costs, net of
tax |
|
- |
|
|
4,514 |
|
|
|
|
|
|
- |
|
|
63,708 |
|
|
|
|
|
Intangible asset amortization,
net related to non-controlling interest |
|
- |
|
|
(2,737 |
) |
|
|
|
|
|
- |
|
|
(39,054 |
) |
|
|
|
|
Accreted interest on DNI
contingent consideration |
|
- |
|
|
1,848 |
|
|
|
|
|
|
- |
|
|
26,360 |
|
|
|
|
|
Facility fees for debt |
|
- |
|
|
321 |
|
|
|
|
|
|
- |
|
|
4,580 |
|
|
|
|
|
Fundamental |
|
(59,062 |
) |
|
(257,068 |
) |
|
(1.04 |
) |
|
(4.53 |
) |
|
(1,037,652 |
) |
|
(3,668,946 |
) |
|
(18.28 |
) |
|
(64.64 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net 1 UEPS Technologies, Inc.
Attachment C
Reconciliation of net loss used to
calculate loss per share basic and diluted and headline loss per
share basic and diluted:
Three months ended June 30, 2020 and
2019
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
Net loss
(USD’000) |
(38,880 |
) |
|
(183,048 |
) |
Adjustments: |
|
|
|
|
Loss (Gain) on sale of
DNI |
1,010 |
|
|
(177 |
) |
|
Loss on deconsolidation of
CPS |
7,148 |
|
|
- |
|
|
Impairment loss |
- |
|
|
6,249 |
|
|
Loss (Profit) on sale of
property, plant and equipment |
(32 |
) |
|
(73 |
) |
|
Tax effects on above |
9 |
|
|
20 |
|
|
|
|
|
|
Net loss used to
calculate headline loss (USD’000) |
(30,745 |
) |
|
(177,029 |
) |
|
|
|
|
|
Weighted average
number of shares used to calculate net loss per share basic loss
and headline loss per share basic loss (‘000) |
57,119 |
|
|
56,804 |
|
|
|
|
|
|
Weighted average
number of shares used to calculate net loss per share diluted loss
and headline loss per share diluted loss (‘000) |
57,119 |
|
|
56,804 |
|
|
|
|
|
|
Headline loss per
share: |
|
|
|
|
Basic, in USD |
(0.54 |
) |
|
(3.12 |
) |
|
Diluted, in USD |
(0.54 |
) |
|
(3.12 |
) |
Year ended June 30, 2020 and
2019
|
|
2020 |
|
2019 |
|
|
|
|
|
Net loss
(USD’000) |
(78,358 |
) |
|
(311,007 |
) |
Adjustments: |
|
|
|
|
Impairment of equity method investments |
33,831 |
|
|
- |
|
|
(Gain) Loss on disposal of
discontinued operation |
(12,454 |
) |
|
9,175 |
|
|
Gain on disposal of
FIHRST |
(9,743 |
) |
|
- |
|
|
Impairment loss |
6,336 |
|
|
19,745 |
|
|
Loss on deconsolidation of
CPS |
7,148 |
|
|
- |
|
|
Loss (Gain) on sale of
DNI |
1,010 |
|
|
(177 |
) |
|
Profit on sale of property,
plant and equipment |
(127 |
) |
|
(486 |
) |
|
Tax effects on above |
36 |
|
|
136 |
|
|
|
|
|
|
Net loss used to
calculate headline loss (USD’000) |
(52,321 |
) |
|
(282,614 |
) |
|
|
|
|
|
Weighted average
number of shares used to calculate net loss per share basic loss
and headline loss per share basic loss (‘000) |
56,764 |
|
|
56,760 |
|
|
|
|
|
|
Weighted average
number of shares used to calculate net loss per share diluted loss
and headline loss per share diluted loss (‘000) |
56,764 |
|
|
56,778 |
|
|
|
|
|
|
Headline loss per
share: |
|
|
|
|
Basic, in USD |
(0.92 |
) |
|
(4.98 |
) |
|
Diluted, in USD |
(0.92 |
) |
|
(4.98 |
) |
Calculation of the denominator for headline diluted loss
per share
|
|
|
Q4 2020 |
|
Q4 2019 |
|
F2020 |
|
F2019 |
|
|
|
|
|
|
|
|
|
|
Basic
weighted-average common shares outstanding and unvested restricted
shares expected to vest under GAAP |
57,119 |
|
56,804 |
|
56,764 |
|
56,760 |
|
Effect of dilutive
securities under GAAP |
- |
|
- |
|
- |
|
18 |
|
|
Denominator for headline
diluted loss per share |
57,119 |
|
56,804 |
|
56,764 |
|
56,778 |
Weighted average number of shares used to
calculate headline diluted loss per share represents the
denominator for basic weighted-average common shares outstanding
and unvested restricted shares expected to vest plus the effect of
dilutive securities under GAAP. We use this number of fully-diluted
shares outstanding to calculate headline diluted loss per share
because we do not use the two-class method to calculate headline
diluted loss per share.
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