Net 1 UEPS Technologies, Inc. (Nasdaq: UEPS; JSE: NT1) today
released results for the first fiscal quarter ended September 30,
2020.
Q1 2021 Highlights and Recent Developments:
- Revenue of $37.1 million, a
constant currency decrease of 12% from Q1 2020, but an increase of
39% from Q4 2020;
- Operating loss of $(10.8)
million;
- GAAP EPS of $(0.51) and Fundamental
EPS of $(0.23);
- Adjusted EBITDA loss of $(9.8)
million, a sequential improvement from a loss of $(12.2) million in
Q4 2020; and
- At September 30, 2020, had
unrestricted cash of $209 million and no debt
“We are pleased to see some encouraging signs in
our operational and financial results this quarter. With the return
to full operations, we have seen increased transaction processing
volumes, loan originations, and a significant increase in the
utilization of our ATM infrastructure over Q4 of FY2020,” said Alex
Smith, Net1’s interim CEO and CFO.
“While we do not yet have a resolution of our
Investment Company Act status, we believe we have the right team
involved and are working diligently to resolve this issue as soon
as possible. In the meantime, the Board has formed a capital
allocation plan to return capital to shareholders while also
providing adequate funds for internal organic growth as well as
strategic acquisitions for the Company,” continued Smith.
“Our long-term initiatives remain unchanged – to
be the leading financial technology company in South Africa focused
on underserviced customers. We believe that we have the
capabilities, technology and infrastructure to make this strategic
vision a reality. We believe that Net1 is better placed than any
other business in the country to service that very large total
addressable market and look forward to the journey ahead,”
concluded Smith.
Summary Financial
Metrics
|
Q1 2021 |
|
Q1 2020 |
|
Q4 2020 |
|
Q1 ’21 vsQ1 ’20 |
|
Q1 ’21 vsQ4 ’20 |
|
Q1 ’21 vsQ1 ’20 |
|
Q1 ’21 vsQ4 ’20 |
(All figures in
USD ‘000s except per share data) |
USD ‘000’s (except per share
data) |
|
% change in USD |
|
% change in ZAR |
Revenue |
37,113 |
|
|
47,938 |
|
|
25,978 |
|
|
(23 |
%) |
|
43 |
% |
|
(12 |
%) |
|
39 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
loss |
(10,775 |
) |
|
(6,436 |
) |
|
(13,180 |
) |
|
67 |
% |
|
(18 |
%) |
|
90 |
% |
|
(21 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(loss) (1) |
(9,822 |
) |
|
(4,306 |
) |
|
(12,184 |
) |
|
128 |
% |
|
(19 |
%) |
|
159 |
% |
|
(22 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP (loss)
earnings per share ($) |
(0.51 |
) |
|
(0.08 |
) |
|
(0.68 |
) |
|
538 |
% |
|
(26 |
%) |
|
625 |
% |
|
(28 |
%) |
Continuing |
(0.51 |
) |
|
(0.13 |
) |
|
(0.68 |
) |
|
292 |
% |
|
(25 |
%) |
|
346 |
% |
|
(27 |
%) |
Discontinued |
- |
|
|
0.05 |
|
|
(0.00 |
) |
|
nm |
|
nm |
|
nm |
|
nm |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fundamental loss
per share ($)(1) |
(0.23 |
) |
|
(0.02 |
) |
|
(0.22 |
) |
|
1,050 |
% |
|
5 |
% |
|
1,208 |
% |
|
1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fully-diluted
shares outstanding (‘000’s) |
57,119 |
|
|
56,568 |
|
|
57,119 |
|
|
1 |
% |
|
- |
|
|
nm |
|
nm |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average period
USD/ ZAR exchange rate |
16.77 |
|
|
14.75 |
|
|
17.28 |
|
|
14 |
% |
|
(3 |
%) |
|
nm |
|
nm |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
The COVID-19 pandemic did not impact the
Company’s South African operations as severely during Q1 2021, as
it did in Q4 2020. Nevertheless, South Africa currently remains
under various lockdown restrictions, which continue to affect the
broader economy, and these restrictions affect us to the extent
they affect economic activity levels in South Africa. The Company
does not believe there will be any further significant adverse
effects on its liquidity from the pandemic, unless there is a
resumption of the higher level of restrictions in South Africa in
the event of an increase in the level of infections, as is
currently being experienced in Europe and the United States
following the second wave of the pandemic there.
Factors
impacting comparability
of our Q1 2021
and Q1 2020
results
- Lower revenue: Our
revenues decreased 12% in ZAR primarily due to fewer prepaid
airtime sales and lower account fee revenue, which was partially
offset by higher transaction fees;
- Ongoing operating
losses: Operating costs are largely in line with the prior
period in ZAR due to the largely fixed cost nature of the costs
base. As a result, we continue to experience operating losses as a
result of depressed revenues; and
- Adverse foreign exchange
movements: The U.S. dollar was 14% stronger against the
ZAR during Q1 2021, which adversely impacted our reported
results.
Results of
Operations by
Segment and
Liquidity
Processing
Segment revenue was $23.3 million in Q1 2021,
down 9%, compared with Q1 2020 but increased 34% compared to Q4
2020 on a constant currency basis. Excluding IPG, segment revenue
decreased primarily due to fewer prepaid airtime sales, which was
partially offset by higher volume-driven transaction fees.
Excluding IPG, Processing operating loss has been impacted lower
revenue and by an increase in transaction-based costs. IPG incurred
an operating loss but is in the process of being closed down. Our
operating loss margin for Q1 2021 and 2020 was (29.8%) and (18.3%),
respectively. Excluding IPG, our operating loss margin for the
Processing segment was (19.5%) and (12.1%) during Q1 2021 and 2020,
respectively.
Financial services
Segment revenue from continuing operations was
$8.3 million in Q1 2021, down 34% on a constant currency basis
compared with Q1 2020 and down from $8.8 million compared to Q4
2020. Segment revenue decreased due to lower account fee revenue
whilst lending and insurance revenues were relatively flat compared
to the prior period. The segment incurred an operating loss
compared with fiscal 2020 primarily due to the reduction in account
fee revenue as well as higher employee-related costs and an
increase in insurance claims experience. Operating (loss) income
margin for Q1 2021 and 2020 was (28.7%) and 2.4%, respectively.
Technology
Segment revenue was $6.2 million in Q1 2021,
down 2% on a constant currency basis compared with Q1 2020 but
significantly higher than the $1.9 million in Q4 2020. Operating
income for Q1 2021 improved compared with fiscal 2020 due to
improved margins on the sale of hardware. Operating income margin
for the Technology segment was 28.6% and 15.9% during Q1 2021 and
2020, respectively
Corporate/eliminations
Our corporate expenses increased primarily due
to foreign exchange losses incurred and higher legal fees, which
were partially offset by lower audit and consulting fees.
Cash flow and
liquidity
At September 30, 2020, cash and cash equivalents
were $209.2 million and comprised of U.S. dollar-denominated
balances of $174.0 million, ZAR-denominated balances of ZAR 547.2
million ($32.5 million), and other currency deposits, primarily
Botswana pula, of $2.7 million, all amounts translated at exchange
rates applicable as of September 30, 2020. The decrease in
unrestricted cash balances from June 30, 2020, was primarily due to
the payment of Federal income taxes, weak trading activities and an
increase in our lending book, which was partially offset by the
receipt of the outstanding proceeds related to the sale of our
Korean business.
Excluding the impact of income taxes, cash used
in operating activities during the first quarter of fiscal 2021 was
impacted by the cash losses incurred by the majority of our
continuing operations and the growth in our lending book. Net cash
used in operating activities during the first quarter of fiscal
2020 includes the contribution from our Korean operations. We paid
income taxes of approximately $15.4 million during Q1 2021,
compared with $1.9 million during Q1 2020. Capital expenditures for
Q1 2021 and 2020 were $0.3 million and $2.6 million,
respectively.
Conference Call
We will host a conference call to review these
results on November 6, 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 November 29,
2020.
Participants are now able to
pre-register for the November
6, 2020, conference call by navigating
to
https://www.diamondpass.net/4251389.
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. Adjusted EBITDA is EBITDA
adjusted for costs related to acquisitions and transactions
consummated or ultimately not pursued.
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), 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 2021 also includes impairment losses
related to our equity-accounted investment and the deferred tax
liability reversal related to the impairment of the
equity-accounted investment, and fiscal 2020 also includes the
amortization of intangible assets (net of deferred taxes) related
to equity-accounted investments.
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 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 South African-focused financial
technology company with a presence in Africa, Asia and Europe. Net1
utilizes 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 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:Dara Dierks Managing Director – ICR Email:
net1IR@icrinc.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 |
|
Three months ended |
|
September 30, |
|
2020 |
|
2019 |
|
|
|
|
|
(In thousands) |
|
|
|
|
|
|
REVENUE |
$ |
37,113 |
|
|
$ |
47,938 |
|
|
|
|
|
|
|
EXPENSE |
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold, IT processing, servicing and support |
|
28,437 |
|
|
|
32,428 |
|
Selling, general and administration |
|
18,528 |
|
|
|
20,622 |
|
Depreciation and amortization |
|
923 |
|
|
|
1,324 |
|
|
|
|
|
|
|
OPERATING
LOSS |
|
(10,775 |
) |
|
|
(6,436 |
) |
|
|
|
|
|
|
INTEREST
INCOME |
|
611 |
|
|
|
363 |
|
|
|
|
|
|
|
INTEREST
EXPENSE |
|
747 |
|
|
|
1,347 |
|
|
|
|
|
|
|
LOSS BEFORE INCOME
TAX (BENEFIT) EXPENSE |
|
(10,911 |
) |
|
|
(7,420 |
) |
|
|
|
|
|
|
INCOME TAX
(BENEFIT) EXPENSE |
|
(1,090 |
) |
|
|
970 |
|
|
|
|
|
|
|
NET LOSS BEFORE
(LOSS) EARNINGS FROM EQUITY-ACCOUNTED INVESTMENTS |
|
(9,821 |
) |
|
|
(8,390 |
) |
|
|
|
|
|
|
(LOSS) EARNINGS
FROM EQUITY-ACCOUNTED INVESTMENTS |
|
(19,137 |
) |
|
|
1,063 |
|
|
|
|
|
|
|
NET LOSS FROM
CONTINUING OPERATIONS |
|
(28,958 |
) |
|
|
(7,327 |
) |
|
|
|
|
|
|
NET INCOME FROM
DISCONTINUED OPERATIONS |
|
- |
|
|
|
2,935 |
|
|
|
|
|
|
|
NET LOSS |
|
(28,958 |
) |
|
|
(4,392 |
) |
|
|
|
|
|
|
NET (LOSS) INCOME
ATTRIBUTABLE TO NET1 |
|
(28,958 |
) |
|
|
(4,392 |
) |
Continuing |
|
(28,958 |
) |
|
|
(7,327 |
) |
Discontinued |
$ |
- |
|
|
$ |
2,935 |
|
|
|
|
|
|
|
Net (loss)
earnings per share, in United States dollars: |
|
|
|
|
|
Basic (loss)
earnings attributable to Net1 shareholders |
$ |
(0.51 |
) |
|
$ |
(0.08 |
) |
Continuing |
$ |
(0.51 |
) |
|
$ |
(0.13 |
) |
Discontinued |
$ |
- |
|
|
$ |
0.05 |
|
Diluted (loss)
earnings attributable to Net1 shareholders |
$ |
(0.51 |
) |
|
$ |
(0.08 |
) |
Continuing |
$ |
(0.51 |
) |
|
$ |
(0.13 |
) |
Discontinued |
$ |
- |
|
|
$ |
0.05 |
|
|
|
|
|
|
|
|
|
NET 1 UEPS TECHNOLOGIES, INC. |
Unaudited Consolidated Balance Sheets |
|
Unaudited |
|
(A) |
|
September 30, |
|
June 30, |
|
2020 |
|
2020 |
|
|
|
|
|
(In thousands, except share data) |
ASSETS |
|
|
|
|
|
CURRENT
ASSETS |
|
|
|
|
|
Cash and cash equivalents |
$ |
209,185 |
|
|
$ |
217,671 |
|
Restricted cash |
|
6,726 |
|
|
|
14,814 |
|
Accounts receivable, net of allowance of - September: $286; June:
$253 and other receivables |
|
28,314 |
|
|
|
43,068 |
|
Finance loans receivable, net of allowance of - September: $8,077;
June: $7,658 |
|
20,508 |
|
|
|
15,879 |
|
Inventory |
|
18,084 |
|
|
|
19,860 |
|
Total current assets before settlement assets |
|
282,817 |
|
|
|
311,292 |
|
Settlement assets |
|
3,993 |
|
|
|
8,014 |
|
Total current assets |
|
286,810 |
|
|
|
319,306 |
|
PROPERTY, PLANT
AND EQUIPMENT, net of accumulated depreciation of - September:
$31,182; June: $29,524 |
|
6,286 |
|
|
|
6,656 |
|
OPERATING LEASE
RIGHT-OF-USE |
|
4,848 |
|
|
|
5,395 |
|
EQUITY-ACCOUNTED
INVESTMENTS |
|
50,367 |
|
|
|
65,836 |
|
GOODWILL |
|
24,865 |
|
|
|
24,169 |
|
INTANGIBLE ASSETS,
net of accumulated amortization of - September: $27,798; June:
$27,325 |
|
548 |
|
|
|
612 |
|
DEFERRED INCOME
TAXES |
|
288 |
|
|
|
358 |
|
OTHER LONG-TERM
ASSETS, including reinsurance assets |
|
30,172 |
|
|
|
31,346 |
|
TOTAL
ASSETS |
|
404,184 |
|
|
|
453,678 |
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
CURRENT
LIABILITIES |
|
|
|
|
|
Short-term credit facilities for ATM funding |
|
6,726 |
|
|
|
14,814 |
|
Accounts payable |
|
5,213 |
|
|
|
6,287 |
|
Other payables |
|
25,242 |
|
|
|
23,779 |
|
Operating lease right of use lease liability - current |
|
1,921 |
|
|
|
2,251 |
|
Income taxes payable |
|
1,298 |
|
|
|
16,157 |
|
Total current liabilities before settlement obligations |
|
40,400 |
|
|
|
63,288 |
|
Settlement obligations |
|
3,993 |
|
|
|
8,015 |
|
Total current liabilities |
|
44,393 |
|
|
|
71,303 |
|
DEFERRED INCOME
TAXES |
|
91 |
|
|
|
1,859 |
|
RIGHT-OF-USE
OPERATING LEASE LIABILITY - LONG TERM |
|
3,105 |
|
|
|
3,312 |
|
OTHER LONG-TERM
LIABILITIES, including insurance policy liabilities |
|
2,074 |
|
|
|
2,012 |
|
TOTAL
LIABILITIES |
|
49,663 |
|
|
|
78,486 |
|
COMMITMENTS AND
CONTINGENCIES |
|
- |
|
|
|
- |
|
REDEEMABLE COMMON
STOCK |
|
84,979 |
|
|
|
84,979 |
|
|
|
|
|
|
|
EQUITY |
|
|
|
|
|
NET1 EQUITY: |
|
|
|
|
|
COMMON STOCK |
|
|
|
|
|
Authorized: 200,000,000 with $0.001 par value; |
|
|
|
|
|
Issued and outstanding shares, net of treasury: September:
$56,638,725; June: $57,118,925 |
|
80 |
|
|
|
80 |
|
|
|
|
|
|
|
PREFERRED
STOCK |
|
|
|
|
|
Authorized shares: 50,000,000 with $0.001 par value; |
|
|
|
|
|
Issued and outstanding shares, net of treasury: September: -; June:
- |
|
- |
|
|
|
- |
|
ADDITIONAL
PAID-IN-CAPITAL |
|
301,946 |
|
|
|
301,489 |
|
TREASURY SHARES,
AT COST: September: $24,891,292; June: $24,891,292 |
|
(286,951 |
) |
|
|
(286,951 |
) |
ACCUMULATED OTHER
COMPREHENSIVE LOSS |
|
(161,245 |
) |
|
|
(169,075 |
) |
RETAINED
EARNINGS |
|
415,712 |
|
|
|
444,670 |
|
TOTAL NET1
EQUITY |
|
269,542 |
|
|
|
290,213 |
|
NON-CONTROLLING
INTEREST |
|
- |
|
|
|
- |
|
TOTAL
EQUITY |
|
269,542 |
|
|
|
290,213 |
|
|
|
|
|
|
|
TOTAL
LIABILITIES, REDEEMABLE COMMON STOCK AND SHAREHOLDERS’
EQUITY |
$ |
404,184 |
|
|
$ |
453,678 |
|
|
|
|
|
|
|
|
|
(A) Derived from audited consolidated financial statements.
NET 1 UEPS TECHNOLOGIES, INC. |
Unaudited Condensed Consolidated Statements of Cash
Flows |
|
Unaudited |
|
Three months ended |
|
September 30, |
|
2020 |
|
2019 |
|
|
|
|
|
(In thousands) |
|
|
|
|
|
|
Cash flows
from operating activities |
|
|
|
|
|
Net loss |
$ |
(28,958 |
) |
|
$ |
(4,392 |
) |
Depreciation and amortization |
|
923 |
|
|
|
4,765 |
|
Movement in allowance for doubtful accounts receivable |
|
514 |
|
|
|
512 |
|
Loss (Earnings) from equity-accounted investments |
|
19,137 |
|
|
|
(1,063 |
) |
Movement in allowance for doubtful loans |
|
78 |
|
|
|
- |
|
Fair value adjustment related to financial liabilities |
|
886 |
|
|
|
87 |
|
Interest payable |
|
(63 |
) |
|
|
632 |
|
Loss (Profit) on disposal of property, plant and equipment |
|
(10 |
) |
|
|
(154 |
) |
Stock-based compensation charge |
|
399 |
|
|
|
387 |
|
Dividends received from equity accounted investments |
|
57 |
|
|
|
1,068 |
|
Decrease (Increase) in accounts receivable, pre-funded social
welfare grants receivable and finance loans receivable |
|
(8,115 |
) |
|
|
(5,666 |
) |
(Increase) Decrease in inventory |
|
2,359 |
|
|
|
(12,313 |
) |
(Decrease) Increase in accounts payable and other payables |
|
(415 |
) |
|
|
(3,396 |
) |
(Decrease) Increase in taxes payable |
|
(14,917 |
) |
|
|
1,288 |
|
Decrease in deferred taxes |
|
(1,755 |
) |
|
|
(88 |
) |
Net cash used in operating activities |
|
(29,880 |
) |
|
|
(18,333 |
) |
|
|
|
|
|
|
Cash flows
from investing activities |
|
|
|
|
|
Capital
expenditures |
|
(275 |
) |
|
|
(2,624 |
) |
Proceeds from
disposal of property, plant and equipment |
|
16 |
|
|
|
213 |
|
Proceeds from
disposal of Net1 Korea, net of cash disposed |
|
20,114 |
|
|
|
- |
|
Proceeds from
disposal of DNI as equity-accounted investment |
|
329 |
|
|
|
- |
|
Investment in
equity-accounted investments |
|
- |
|
|
|
(1,250 |
) |
Loan to
equity-accounted investment |
|
(78 |
) |
|
|
- |
|
Repayment of loans
by equity-accounted investments |
|
- |
|
|
|
4,268 |
|
Net change in
settlement assets |
|
4,068 |
|
|
|
(13,509 |
) |
Net cash provided by (used in) investing
activities |
|
24,174 |
|
|
|
(12,902 |
) |
|
|
|
|
|
|
Cash flows
from financing activities |
|
|
|
|
|
Proceeds from bank
overdraft |
|
69,146 |
|
|
|
183,674 |
|
Repayment of bank
overdraft |
|
(76,850 |
) |
|
|
(184,829 |
) |
Proceeds from
disgorgement of shareholders' short-swing profits |
|
98 |
|
|
|
- |
|
Long-term
borrowings utilized |
|
- |
|
|
|
14,798 |
|
Guarantee fee |
|
- |
|
|
|
(148 |
) |
Finance lease
capital repayments |
|
- |
|
|
|
(26 |
) |
Net change in
settlement obligations |
|
(4,068 |
) |
|
|
13,509 |
|
Net cash (used in) provided by financing
activities |
|
(11,674 |
) |
|
|
26,978 |
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash |
|
806 |
|
|
|
(6,455 |
) |
Net
decrease in cash, cash equivalents and restricted
cash |
|
(16,574 |
) |
|
|
(10,712 |
) |
Cash, cash
equivalents and restricted cash – beginning of period |
|
232,485 |
|
|
|
121,511 |
|
Cash, cash
equivalents and restricted cash – end of period |
$ |
215,911 |
|
|
$ |
110,799 |
|
|
|
|
|
|
|
|
|
Net 1 UEPS
Technologies, Inc.
Attachment
A
Operating
segment revenue,
operating (loss)
income and
operating (loss)
margin:
Three months
ended September 30,
2020 and
2019 and
June
30,
2020
|
|
|
|
|
|
|
|
|
|
Change - actual |
Change –constantexchange
rate(1) |
Key segmental data, in ’000, except margins |
|
|
Q1 '21 |
|
|
Q1 '20 |
|
|
Q4 '20 |
Q1 '21 vs Q1
'20 |
Q1 '21 vs Q4
'20 |
Q1 '21 vs Q1
'20 |
Q1 '21 vs Q4
'20 |
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Processing |
|
$ |
24,483 |
|
|
$ |
30,017 |
|
|
$ |
17,818 |
|
(18 |
%) |
37 |
% |
(7 |
%) |
33 |
% |
IPG |
|
|
1,209 |
|
|
|
793 |
|
|
|
921 |
|
52 |
% |
31 |
% |
73 |
% |
27 |
% |
All Other |
|
|
23,274 |
|
|
|
29,224 |
|
|
|
16,897 |
|
(20 |
%) |
38 |
% |
(9 |
%) |
34 |
% |
Financial services |
|
|
8,265 |
|
|
|
14,168 |
|
|
|
8,751 |
|
(42 |
%) |
(6 |
%) |
(34 |
%) |
(8 |
%) |
Technology |
|
|
6,211 |
|
|
|
7,209 |
|
|
|
1,932 |
|
(14 |
%) |
221 |
% |
(2 |
%) |
212 |
% |
Subtotal: Operating segments |
|
|
38,959 |
|
|
|
51,394 |
|
|
|
28,501 |
|
(24 |
%) |
37 |
% |
(14 |
%) |
33 |
% |
Intersegment eliminations |
|
|
(1,846 |
) |
|
|
(3,456 |
) |
|
|
(2,523 |
) |
(47 |
%) |
(27 |
%) |
(39 |
%) |
(29 |
%) |
Consolidated revenue |
|
$ |
37,113 |
|
|
$ |
47,938 |
|
|
$ |
25,978 |
|
(23 |
%) |
43 |
% |
(12 |
%) |
39 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
(loss) income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Processing |
|
$ |
(7,301 |
) |
|
$ |
(5,505 |
) |
|
$ |
(10,089 |
) |
33 |
% |
(28 |
%) |
51 |
% |
(30 |
%) |
IPG |
|
|
(2,772 |
) |
|
|
(1,973 |
) |
|
|
(4,280 |
) |
40 |
% |
(35 |
%) |
60 |
% |
(37 |
%) |
All Other |
|
|
(4,529 |
) |
|
|
(3,532 |
) |
|
|
(5,809 |
) |
28 |
% |
(22 |
%) |
46 |
% |
(24 |
%) |
Financial services |
|
|
(2,372 |
) |
|
|
345 |
|
|
|
(1,016 |
) |
nm |
133 |
% |
nm |
127 |
% |
Technology |
|
|
1,775 |
|
|
|
1,145 |
|
|
|
136 |
|
55 |
% |
1,205 |
% |
76 |
% |
1,167 |
% |
Subtotal: Operating segments |
|
|
(7,898 |
) |
|
|
(4,015 |
) |
|
|
(10,969 |
) |
97 |
% |
(28 |
%) |
124 |
% |
(30 |
%) |
Corporate/Eliminations |
|
|
(2,877 |
) |
|
|
(2,421 |
) |
|
|
(2,211 |
) |
19 |
% |
30 |
% |
35 |
% |
26 |
% |
Consolidated operating (loss) income |
|
$ |
(10,775 |
) |
|
$ |
(6,436 |
) |
|
$ |
(13,180 |
) |
67 |
% |
(18 |
%) |
90 |
% |
(21 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
(loss) income margin (%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Processing |
|
|
(29.8 |
%) |
|
|
(18.3 |
%) |
|
|
(56.6 |
%) |
|
|
|
|
IPG |
|
|
(229.3 |
%) |
|
|
(248.8 |
%) |
|
|
(464.7 |
%) |
|
|
|
|
All Other |
|
|
(19.5 |
%) |
|
|
(12.1 |
%) |
|
|
(34.4 |
%) |
|
|
|
|
Financial services |
|
|
(28.7 |
%) |
|
|
2.4 |
% |
|
|
(11.6 |
%) |
|
|
|
|
Technology |
|
|
28.6 |
% |
|
|
15.9 |
% |
|
|
7.0 |
% |
|
|
|
|
Consolidated operating margin |
|
|
(29.0 |
%) |
|
|
(13.4 |
%) |
|
|
(50.7 |
%) |
|
|
|
|
(1) – This information shows
what the change in these items would have been if the USD/ ZAR
exchange rate that prevailed during Q1 2021 also prevailed during
Q1 2020 and Q4 2020.
(Loss) Earnings
from equity-accounted
investments:
The table below presents the relative (loss)
earnings from our equity-accounted investments:
|
|
Q1 2021 |
|
|
Q1 2020 |
|
% change |
Bank Frick |
|
481 |
|
|
|
(25 |
) |
|
nm |
Share of net income |
|
481 |
|
|
|
119 |
|
|
304 |
% |
Amortization of intangible assets, net of deferred tax |
|
- |
|
|
|
(144 |
) |
|
nm |
DNI |
$ |
- |
|
|
$ |
728 |
|
|
nm |
Share of net income |
|
- |
|
|
|
1,463 |
|
|
nm |
Amortization of intangible assets, net of deferred tax |
|
- |
|
|
|
(466 |
) |
|
nm |
Impairment |
|
- |
|
|
|
(269 |
) |
|
nm |
Finbond |
|
(19,461 |
) |
|
|
491 |
|
|
nm |
Share of net (loss) income |
|
(2,617 |
) |
|
|
491 |
|
|
nm |
Impairment |
|
(16,844 |
) |
|
|
- |
|
|
nm |
Other |
|
(157 |
) |
|
|
(131 |
) |
|
20 |
% |
(Loss) earnings from equity-accounted
investments |
$ |
(19,137 |
) |
|
$ |
1,063 |
|
|
nm |
|
|
|
|
|
|
|
|
|
|
Net 1
UEPS Technologies,
Inc.
Attachment
B
Reconciliation
of GAAP
operating loss
to EBITDA loss
and adjusted
EBITDA loss:
Three months and
year ended September
30, 2020 and
2019
|
Three months endedSeptember 30, |
|
2020 |
|
2019 |
Operating loss - GAAP |
(10,775 |
) |
|
(6,436 |
) |
|
|
|
|
Depreciation and amortization |
923 |
|
|
1,324 |
|
Negative EBITDA |
(9,852 |
) |
|
(5,112 |
) |
Transaction costs |
30 |
|
|
806 |
|
Adjusted EBITDA (loss) |
(9,822 |
) |
|
(4,306 |
) |
|
|
|
|
|
|
Reconciliation
of GAAP net
loss and loss
per share,
basic, to
fundamental net
loss and loss
per share,
basic:
Three months
ended September 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 |
(28,958 |
) |
|
(4,392 |
) |
|
(0.51 |
) |
|
(0.08 |
) |
|
(485,735 |
) |
|
(64,791 |
) |
|
(8.50 |
) |
|
(1.14 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of equity method
investment |
16,844 |
|
|
- |
|
|
|
|
|
|
281,729 |
|
|
- |
|
|
|
|
|
Reversal of deferred taxes
related to impairment of equity method investment |
(1,353 |
) |
|
- |
|
|
|
|
|
|
(22,633 |
) |
|
- |
|
|
|
|
|
Stock-based compensation
charge |
399 |
|
|
387 |
|
|
|
|
|
|
6,693 |
|
|
5,709 |
|
|
|
|
|
Intangible asset amortization,
net |
59 |
|
|
1,413 |
|
|
|
|
|
|
990 |
|
|
20,835 |
|
|
|
|
|
Transaction costs |
30 |
|
|
806 |
|
|
|
|
|
|
503 |
|
|
11,890 |
|
|
|
|
|
Intangible asset amortization,
net related to equity accounted investments |
- |
|
|
610 |
|
|
|
|
|
|
- |
|
|
8,999 |
|
|
|
|
|
Fundamental |
(12,979 |
) |
|
(1,176 |
) |
|
(0.23 |
) |
|
(0.02 |
) |
|
(218,453 |
) |
|
(17,358 |
) |
|
(3.82 |
) |
|
(0.31 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 September 30,
2020 and
2019
|
2020 |
|
2019 |
|
|
|
|
Net loss (USD’000) |
(28,958 |
) |
|
(4,392 |
) |
Adjustments: |
|
|
|
Impairment of equity method investments |
16,844 |
|
|
- |
|
Profit on sale of property, plant and equipment |
(10 |
) |
|
(154 |
) |
Tax effects on above |
(1,350 |
) |
|
43 |
|
|
|
|
|
Net loss used to calculate
headline loss (USD’000) |
(13,474 |
) |
|
(4,503 |
) |
|
|
|
|
Weighted average number of
shares used to calculate net loss per share basic loss and headline
loss per share basic loss (‘000) |
57,119 |
|
|
56,568 |
|
|
|
|
|
Weighted average number of
shares used to calculate net loss per share diluted loss and
headline loss per share diluted loss (‘000) |
57,119 |
|
|
56,568 |
|
|
|
|
|
Headline loss per share: |
|
|
|
Basic, in USD |
(0.24 |
) |
|
(0.08 |
) |
Diluted, in USD |
(0.24 |
) |
|
(0.08 |
) |
|
|
|
|
|
|
Calculation of
the denominator
for headline
diluted loss per
share
|
Q1 2021 |
|
Q1 2020 |
|
|
|
|
Basic weighted-average common
shares outstanding and unvested restricted shares expected to vest
under GAAP |
57,119 |
|
56,568 |
Denominator for headline diluted loss per share |
57,119 |
|
56,568 |
|
|
|
|
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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