Net 1 UEPS Technologies, Inc. (Nasdaq: UEPS; JSE: NT1) today
released results for the second fiscal quarter ended December 31,
2019.
Q2 2020 Highlights:
- Revenue of $74.1 million, GAAP EPS
of $(0.00) and Fundamental EPS of $(0.10);
- Operating loss of $(6.9) million
and adjusted negative EBITDA of $(0.7) million;
- Signed agreement to sell KSNET for
$237 million and disposed of FIHRST for $11.7 million;
- Board replenished share repurchase
authorization to $100 million from $53 million.
“The sale of KSNET marks an important milestone
in the reinvention of Net1 as a fintech company focused on the
underbanked, as it allows us to inject the appropriate liquidity in
our businesses in order to scale our operations in South Africa,
Africa and Europe, while also being able to return significant
capital to our shareholders,” said Herman Kotzé, Net1’s CEO. “We
expect to commence our reinvestment into South Africa during Q4
2020 and should be able to demonstrate tangible improvements as
soon as the first half of fiscal 2021,” he concluded.
“Given the timing of our various corporate
actions and availability of liquidity as well as certain pending
European regulatory approvals, there are a number of moving parts
in our business this year. Using the same assumption of a constant
currency base of ZAR 14.27/$1, we believe fiscal 2020 adjusted
EBITDA is likely to be a loss of approximately $3 million, a
decrease from our previously announced guidance of $16 million.
This decrease is primarily due to an $11 million reduction related
to foregone contributions as a result of the sale of KSNET and
FIHRST, as well as an $8 million negative impact related to the
delayed liquidity injection in South Africa due to the timing of
our asset realizations, and IPG’s inability to launch its new
products due to the dependencies on Visa’s certification,” said
Alex Smith, Net1’s CFO. “Our focus following the injection of
liquidity during Q4 2020 will be to drive new account growth and
financial services in South Africa, and commence with the scaling
up of our new initiatives in Europe, in turn, returning the group
to a positive adjusted EBITDA position in fiscal 2021,” he
concluded.
Sale of KSNETOn January 27, 2020, we agreed to
sell 100% of KSNET, Inc. (“KSNET”), a leading Republic of Korea
(“South Korea”) payment processor, to PayletterHoldings LLC for
approximately $237 million. The transaction, which is not subject
to a financing condition, is expected to close in March 2020.
Replenishment of repurchase authorization back
to $100 millionOn February 5, 2020, our Board of Directors
replenished the authorization to repurchase up to $100 million of
our common shares. The authorization does not have an expiration
date. The share repurchase authorization will be used at
management’s discretion, subject to legal requirements and price
and other internal limitations established by our board of
directors. Repurchases will be funded from our available cash
reserves. Share repurchases may be made through open market
purchases, privately negotiated transactions, or both. There can be
no assurance that we will purchase any shares or any particular
number of shares. The authorization may be suspended, terminated or
modified at any time for any reason, including market conditions,
the cost of repurchasing shares, liquidity and other factors that
management deems appropriate.
Succession plan for ChairmanOn February 5,
2020, our Chairman, Mr. Christopher S. Seabrooke, advised us
that he will resign from his position as a member of our board of
directors and all committees of the board, effective June 30, 2020.
The board appointed Mr. Paul Edwards, one of our independent
directors, to succeed Mr. Seabrooke as our Chairman effective June
30, 2020.
Summary Financial Metrics
|
|
Q2 2020 |
|
Q2 2019 |
|
Q1 2020 |
|
Q2 ’20 vsQ2 ’19 |
|
Q2 ’20 vsQ1 ’20 |
|
Q2 ’20 vsQ2 ’19 |
|
Q2 ’20 vsQ1 ’20 |
(All figures in
USD ‘000s except per share data) |
USD ‘000’s (except per share
data) |
|
% change in USD |
|
% change in ZAR |
Revenue |
74,080 |
|
|
77,442 |
|
|
80,756 |
|
|
(4 |
%) |
|
(8 |
%) |
|
(2 |
%) |
|
(9 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
loss |
(6,854 |
) |
|
(48,901 |
) |
|
(2,734 |
) |
|
(86 |
%) |
|
151 |
% |
|
(86 |
%) |
|
148 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
(negative) EBITDA(1) |
(703 |
) |
|
(33,219 |
) |
|
2,837 |
|
|
(98 |
%) |
|
nm |
|
(98 |
%) |
|
nm |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP (loss)
earnings per share ($) |
(0.00 |
) |
|
(1.13 |
) |
|
(0.08 |
) |
|
(100 |
%) |
|
(95 |
%) |
|
(100 |
%) |
|
(96 |
%) |
|
Continuing |
(0.00 |
) |
|
(1.16 |
) |
|
(0.08 |
) |
|
(100 |
%) |
|
(95 |
%) |
|
(100 |
%) |
|
(96 |
%) |
|
Discontinued |
- |
|
|
0.03 |
|
|
- |
|
|
nm |
|
nm |
|
nm |
|
nm |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fundamental loss
per share ($)(1) |
(0.10 |
) |
|
(0.90 |
) |
|
(0.02 |
) |
|
(89 |
%) |
|
400 |
% |
|
(89 |
%) |
|
395 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fully-diluted
shares outstanding (‘000’s) |
56,568 |
|
|
56,855 |
|
|
56,568 |
|
|
(1 |
%) |
|
- |
|
|
nm |
|
nm |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average period
USD/ ZAR exchange rate |
14.60 |
|
|
14.32 |
|
|
14.75 |
|
|
2 |
% |
|
(1 |
%) |
|
nm |
|
nm |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F2020 |
|
F2019 |
|
F2020 vsF2019 |
|
F2020 vsF2019 |
|
|
|
|
|
(All figures in
USD ‘000s except per share data) |
USD ‘000’s (except per share
data) |
% changein USD |
|
% changein ZAR |
Revenue |
154,836 |
|
|
184,539 |
|
|
(16 |
%) |
|
(16 |
%) |
|
|
|
|
|
|
|
|
|
GAAP operating
loss |
(9,588 |
) |
|
(53,187 |
) |
|
(82 |
%) |
|
(82 |
%) |
|
|
|
|
|
|
|
|
|
Adjusted
(negative) EBITDA(1) |
2,134 |
|
|
(28,098 |
) |
|
nm |
|
nm |
|
|
|
|
|
|
|
|
|
GAAP (loss)
earnings per share ($) |
(0.08 |
) |
|
(1.22 |
) |
|
(93 |
%) |
|
(93 |
%) |
|
Continuing |
(0.08 |
) |
|
(1.28 |
) |
|
(94 |
%) |
|
(94 |
%) |
|
Discontinued |
- |
|
|
0.06 |
|
|
nm |
|
nm |
|
|
|
|
|
|
|
|
|
Fundamental loss
per share ($)(1) |
(0.12 |
) |
|
(0.88 |
) |
|
(86 |
%) |
|
(86 |
%) |
|
|
|
|
|
|
|
|
|
Fully-diluted
shares outstanding (‘000’s) |
56,568 |
|
|
56,814 |
|
|
(0 |
%) |
|
nm |
|
|
|
|
|
|
|
|
|
Average period
USD/ ZAR exchange rate |
14.40 |
|
|
14.34 |
|
|
0 |
% |
|
nm |
(1) Adjusted (negative) EBITDA,
fundamental loss and fundamental loss per share are non-GAAP
measures and are described below under “Use of Non-GAAP
Measures—negative EBITDA and Adjusted negative EBITDA, and
—Fundamental net (loss) income and fundamental (loss) earnings per
share.” See Attachment B for a reconciliation of GAAP operating
(loss) income to negative EBITDA and Adjusted negative EBITDA, and
GAAP net (loss) income to fundamental net (loss) income and (loss)
earnings per share.
Factors impacting comparability of our
Q2 2020 and Q2 2019 results
- Decline in
revenue: Our revenues declined 2% in ZAR primarily due to
the significant decline in EPE account numbers driven by SASSA’s
auto-migration of accounts to SAPO, and a reduction in EPE-related
financial and value-added services and transaction fees due to a
smaller customer base, but partially offset by higher ad hoc
terminal and prepaid airtime sales;
- Ongoing operating
losses: We continue to experience operating losses
primarily in South Africa as a result of lower revenues, coupled
with a high-fixed cost infrastructure;
- Gain on disposal of
FIHRST: We recorded a gain of $9.7 million related to the
disposal of FIHRST in December 2019;
- Higher net interest
expense: Net interest expense increased due to lower
average cash balances and higher short-term borrowing to fund ATMs
and utilization of our overdrafts, but was partially offset by the
repayment of our long-term debt in the second half of fiscal 2019;
and
- Adverse foreign exchange
movements: The U.S. dollar appreciated 2% against the ZAR
and 4% against the KRW during Q2 2020, which adversely impacted our
reported results.
Results of Operations by Segment and
Liquidity
South African transaction
processing
Segment revenue was $20.4 million in Q2 2020,
down 6% on a constant currency basis compared with Q2 2019 but up
from $19.4 million in Q1 2020. The decrease in segment revenue was
primarily due to fewer transactions performed at our ATM base and
lower fees as a result of fewer EPE and SASSA accounts. Our South
African transaction processing operating segment revenue and
operating loss have been adversely impacted by the loss of EPE
customers as a result of SASSA’s auto-migration of accounts to
SAPO. The reduced operating loss in the segment is due to the cost
cutting that has occurred over the last 12 months. Our operating
loss margin for Q2 2020 and 2019 was (14.6%) and (53.8%),
respectively.
International transaction
processing
Segment revenue was $34.4 million in Q2 2020,
down 8% on a constant currency basis compared with Q2 2019 and up
from $34.0 million in Q1 2020. Segment revenue was lower during Q2
2020, primarily due to an ongoing contraction in IPG transactions
processed, specifically meaningfully lower crypto-exchange and
China processing activity, modestly lower KSNET revenue as a result
of lower transaction values processed and the impact of the weaker
KRW/ USD exchange rate on reported KSNET revenue. Operating income
in Q2 2020 has improved compared with Q2 2019 due to improved
profitability of KSNET and the impairment loss recorded in Q2 2019.
Operating income (loss) margin for the second quarter of fiscal
2020 and 2019 was 8.2% and (10.6%), respectively. Excluding the
goodwill impairment, segment operating income and margin for Q2
2019 were $3.0 million and 7.8%, respectively.
Financial inclusion and applied
technologies
Segment revenue was $22.0 million in Q2 2020, up
18% on a constant currency basis compared with Q2 2019 but down
from $30.1 million in Q1 2020. Segment revenue increased primarily
due to higher ad hoc terminal and prepaid airtime sales, partially
offset by lower lending revenue as a result of a moderate
contraction in our lending book and lower insurance revenue as a
result of fewer customers, and a decrease in inter-segment
revenues. Excluding the impact of the allowance for doubtful
finance loans recorded in Q2 2019, the operating loss from
continuing operations for Q2 2020 was better than Q2 2019 due to
the contribution from the ad hoc terminal and airtime sales.
Operating income during Q2 2019 was significantly impacted by an
allowance for doubtful finance loans receivable of $23.4 million
(ZAR 335.1 million). Operating income margin from continuing
operations for the Financial inclusion and applied technologies
segment was (4.0%) and (141.6%) during Q2 2020 and 2019,
respectively.
Corporate/eliminations
Our corporate expenses decreased primarily due
to lower acquired intangible asset amortization expense related to
intangible assets that were fully amortized during fiscal 2019,
partially offset by higher transaction-related expenditures.
Cash flow and liquidity
At December 31, 2019, our cash and cash
equivalents were $50.7 million and comprised of KRW-denominated
balances of KRW 36.2 billion ($31.3 million), ZAR-denominated
balances of ZAR 197.0 million ($14.0 million), U.S.
dollar-denominated balances of $1.8 million, and other currency
deposits, primarily Botswana pula, of $3.6 million, all amounts
translated at exchange rates applicable as of December 31, 2019.
The increase in our unrestricted cash balances from June 30,
2019, was primarily due to utilization of our short-term borrowings
and repayment of a loan outstanding by DNI, which was partially
offset by weaker trading activities, capital expenditures, and an
additional investment in V2.
Excluding the impact of interest received,
interest paid under our South Africa debt and taxes, the increase
in cash provided is primarily due to the repayment of finance loans
receivable at the end of December 2019. These finance loans
receivable are typically settled at the beginning of the new month
(in this case January 2020) but were settled in December 2019, due
to the opening of the January 2020 grant distribution file in
December 2019. Capital expenditures for Q2 2020 and 2019 were $0.8
million and $2.5 million, respectively, and Q2 2020 capital
expenditures relate primarily to the acquisition of processing
equipment in South Korea to maintain operations.
Operating metrics and supplemental
presentation for Q2 2020 Results
A supplemental presentation and operating
metrics for Q2 2020 will be posted to the Investor Relations page
of our website – ir.net1.com prior to our earnings call on Friday,
February 7, 2020.
Conference Call
We will host a conference call to review these
results on February 7, 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 March 1, 2020.
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 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.
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, the
amortization of debt facility fees 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 gain related to the disposal of FIHRST and fiscal 2019 also
includes the non-controlling interest portion of the amortization
of intangible assets (net of deferred taxes).
We provide earnings guidance only on a non-GAAP
basis and do not provide a reconciliation of forward-looking
adjusted EBITDA guidance to the most directly comparable GAAP
financial measures because of the inherent difficulty in
forecasting and quantifying certain amounts that are necessary for
such reconciliation, the amounts of which, based on past
experience, could be material.
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 gain on disposal of FIHRST,
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 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 through DNI 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: the Company failing to
close the KSNET sale transaction, failing to achieve the Company’s
expected levels of liquidity, receiving favorable pending European
regulatory approvals, achieving the levels of EBITDA expected, 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, 2019, 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 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 |
|
|
|
Three months ended |
|
|
Six months ended |
|
|
|
|
December 31, |
|
|
December 31, |
|
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
(In thousands, except per share data) |
|
|
(In thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUE |
|
$ |
74,080 |
|
|
$ |
77,442 |
|
|
$ |
154,836 |
|
|
$ |
184,539 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold, IT
processing, servicing and support |
|
|
43,160 |
|
|
|
41,231 |
|
|
|
89,954 |
|
|
|
103,335 |
|
|
Selling, general and
administration |
|
|
33,393 |
|
|
|
69,730 |
|
|
|
65,324 |
|
|
|
111,152 |
|
|
Depreciation and
amortization |
|
|
4,381 |
|
|
|
7,191 |
|
|
|
9,146 |
|
|
|
15,048 |
|
|
Impairment loss |
|
|
- |
|
|
|
8,191 |
|
|
|
- |
|
|
|
8,191 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
LOSS |
|
|
(6,854 |
) |
|
|
(48,901 |
) |
|
|
(9,588 |
) |
|
|
(53,187 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHANGE IN FAIR
VALUE OF EQUITY SECURITIES |
|
|
- |
|
|
|
(15,836 |
) |
|
|
- |
|
|
|
(15,836 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAIN ON DISPOSAL
OF FIHRST |
|
|
9,743 |
|
|
|
- |
|
|
|
9,743 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST
INCOME |
|
|
1,343 |
|
|
|
2,177 |
|
|
|
1,994 |
|
|
|
3,778 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST
EXPENSE |
|
|
3,221 |
|
|
|
2,563 |
|
|
|
4,576 |
|
|
|
5,121 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IMPAIRMENT OF
CEDAR CELLULAR NOTE |
|
|
- |
|
|
|
2,732 |
|
|
|
- |
|
|
|
2,732 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME (LOSS)
BEFORE INCOME TAX EXPENSE (BENEFIT) |
|
|
1,011 |
|
|
|
(67,855 |
) |
|
|
(2,427 |
) |
|
|
(73,098 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME TAX EXPENSE
(BENEFIT) |
|
|
1,722 |
|
|
|
(4,398 |
) |
|
|
3,739 |
|
|
|
577 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS BEFORE
EARNINGS (LOSS) FROM EQUITY-ACCOUNTED INVESTMENTS |
|
|
(711 |
) |
|
|
(63,457 |
) |
|
|
(6,166 |
) |
|
|
(73,675 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS (LOSS)
FROM EQUITY-ACCOUNTED INVESTMENTS |
|
|
506 |
|
|
|
(1,291 |
) |
|
|
1,569 |
|
|
|
184 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS FROM
CONTINUING OPERATIONS |
|
|
(205 |
) |
|
|
(64,748 |
) |
|
|
(4,597 |
) |
|
|
(73,491 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME FROM
DISCONTINUED OPERATIONS |
|
|
- |
|
|
|
3,779 |
|
|
|
- |
|
|
|
7,418 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET (LOSS)
INCOME |
|
|
(205 |
) |
|
|
(60,969 |
) |
|
|
(4,597 |
) |
|
|
(66,073 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LESS (ADD) NET
INCOME (LOSS) ATTRIBUTABLE TO NON-CONTROLLING INTEREST |
|
|
- |
|
|
|
2,972 |
|
|
|
- |
|
|
|
3,067 |
|
|
Continuing |
|
|
- |
|
|
|
721 |
|
|
|
- |
|
|
|
(877 |
) |
|
Discontinued |
|
|
- |
|
|
|
2,251 |
|
|
|
- |
|
|
|
3,944 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET (LOSS) INCOME
ATTRIBUTABLE TO NET1 |
|
|
(205 |
) |
|
|
(63,941 |
) |
|
|
(4,597 |
) |
|
|
(69,140 |
) |
|
Continuing |
|
|
(205 |
) |
|
|
(65,469 |
) |
|
|
(4,597 |
) |
|
|
(72,614 |
) |
|
Discontinued |
|
$ |
- |
|
|
$ |
1,528 |
|
|
$ |
- |
|
|
$ |
3,474 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
earnings per share, in United States dollars: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic (loss)
earnings attributable to Net1 shareholders |
|
$ |
(0.00 |
) |
|
$ |
(1.13 |
) |
|
$ |
(0.08 |
) |
|
$ |
(1.22 |
) |
|
Continuing |
|
$ |
(0.00 |
) |
|
$ |
(1.16 |
) |
|
$ |
(0.08 |
) |
|
$ |
(1.28 |
) |
|
Discontinued |
|
$ |
- |
|
|
$ |
0.03 |
|
|
$ |
- |
|
|
$ |
0.06 |
|
Diluted (loss)
earnings attributable to Net1 shareholders |
|
$ |
(0.00 |
) |
|
$ |
(1.12 |
) |
|
$ |
(0.08 |
) |
|
$ |
(1.22 |
) |
|
Continuing |
|
$ |
(0.00 |
) |
|
$ |
(1.15 |
) |
|
$ |
(0.08 |
) |
|
$ |
(1.28 |
) |
|
Discontinued |
|
$ |
- |
|
|
$ |
0.03 |
|
|
$ |
- |
|
|
$ |
0.06 |
|
|
NET 1 UEPS TECHNOLOGIES, INC. |
Unaudited Consolidated Balance Sheets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
June 30, |
|
|
|
|
|
|
|
2019 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands, except share data) |
|
|
|
|
|
ASSETS |
|
|
|
|
|
CURRENT
ASSETS |
|
|
|
|
|
|
Cash and cash
equivalents |
$ |
50,719 |
|
|
$ |
46,065 |
|
|
Restricted
cash |
|
84,360 |
|
|
|
75,446 |
|
|
Accounts
receivable, net of allowance of - Dec: $744; Jun: $1,241 and other
receivables |
|
68,565 |
|
|
|
72,494 |
|
|
Finance loans
receivable, net of allowance of - Dec: $8,710; Jun: $9,291 |
|
29,117 |
|
|
|
30,631 |
|
|
Inventory |
|
21,196 |
|
|
|
7,535 |
|
|
|
Total current
assets before settlement assets |
|
253,957 |
|
|
|
232,171 |
|
|
|
|
Settlement
assets |
|
55,401 |
|
|
|
63,479 |
|
|
|
|
|
Total current
assets |
|
309,358 |
|
|
|
295,650 |
|
PROPERTY, PLANT
AND EQUIPMENT, net of accumulated depreciation of - Dec: $121,584;
Jun: $129,185 |
|
16,450 |
|
|
|
18,554 |
|
OPERATING LEASE
RIGHT-OF-USE |
|
7,838 |
|
|
|
- |
|
EQUITY-ACCOUNTED
INVESTMENTS |
|
155,627 |
|
|
|
151,116 |
|
GOODWILL |
|
148,938 |
|
|
|
149,387 |
|
INTANGIBLE ASSETS,
net of accumulated amortization of - Dec: $126,905; Jun:
$127,100 |
|
8,043 |
|
|
|
11,889 |
|
DEFERRED INCOME
TAXES |
|
2,112 |
|
|
|
2,151 |
|
OTHER LONG-TERM
ASSETS, including reinsurance assets |
|
41,144 |
|
|
|
44,189 |
|
TOTAL
ASSETS |
|
689,510 |
|
|
|
672,936 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
CURRENT
LIABILITIES |
|
|
|
|
|
|
Short-term credit
facilities for ATM funding |
|
84,360 |
|
|
|
75,446 |
|
|
Short-term credit
facilities |
|
13,906 |
|
|
|
9,544 |
|
|
Accounts
payable |
|
14,211 |
|
|
|
17,005 |
|
|
Other
payables |
|
69,134 |
|
|
|
66,449 |
|
|
Operating lease
right of use lease liability - current |
|
3,534 |
|
|
|
- |
|
|
Current portion of
long-term borrowings |
|
4,063 |
|
|
|
- |
|
|
Income taxes
payable |
|
5,043 |
|
|
|
6,223 |
|
|
|
Total current
liabilities before settlement obligations |
|
194,251 |
|
|
|
174,667 |
|
|
|
|
Settlement
obligations |
|
55,402 |
|
|
|
63,479 |
|
|
|
|
|
Total current
liabilities |
|
249,653 |
|
|
|
238,146 |
|
DEFERRED INCOME
TAXES |
|
4,503 |
|
|
|
4,682 |
|
RIGHT-OF-USE
OPERATING LEASE LIABILITY - LONG TERM |
|
4,499 |
|
|
|
- |
|
OTHER LONG-TERM
LIABILITIES, including insurance policy liabilities |
|
2,623 |
|
|
|
3,007 |
|
TOTAL
LIABILITIES |
|
261,278 |
|
|
|
245,835 |
|
COMMITMENTS AND
CONTINGENCIES |
|
- |
|
|
|
- |
|
REDEEMABLE COMMON
STOCK |
|
107,672 |
|
|
|
107,672 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY |
|
|
|
|
|
NET1 EQUITY: |
|
|
|
|
|
COMMON STOCK |
|
|
|
|
|
|
Authorized:
200,000,000 with $0.001 par value; |
|
|
|
|
|
|
Issued and
outstanding shares, net of treasury: Dec: $56,568,425; Jun:
$56,568,425 |
|
80 |
|
|
|
80 |
|
|
|
|
|
|
|
|
|
|
|
|
PREFERRED
STOCK |
|
|
|
|
|
|
Authorized shares:
50,000,000 with $0.001 par value; |
|
|
|
|
|
|
Issued and
outstanding shares, net of treasury: Dec: -; Jun: - |
|
- |
|
|
|
- |
|
ADDITIONAL
PAID-IN-CAPITAL |
|
277,891 |
|
|
|
276,997 |
|
TREASURY SHARES,
AT COST: Dec: $-24,891,292; Jun: $-24,891,292 |
|
(286,951 |
) |
|
|
(286,951 |
) |
ACCUMULATED OTHER
COMPREHENSIVE LOSS |
|
(194,439 |
) |
|
|
(199,273 |
) |
RETAINED
EARNINGS |
|
523,979 |
|
|
|
528,576 |
|
TOTAL NET1
EQUITY |
|
320,560 |
|
|
|
319,429 |
|
NON-CONTROLLING
INTEREST |
|
- |
|
|
|
- |
|
TOTAL
EQUITY |
|
320,560 |
|
|
|
319,429 |
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES, REDEEMABLE COMMON STOCK AND SHAREHOLDERS’
EQUITY |
$ |
689,510 |
|
|
$ |
672,936 |
|
|
NET 1 UEPS TECHNOLOGIES, INC. |
Unaudited Condensed Consolidated Statements of Cash
Flows |
|
|
|
|
Three months ended |
|
|
Six months ended |
|
|
|
|
December 31, |
|
|
December 31, |
|
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
(In thousands) |
|
|
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows
from operating activities |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(205 |
) |
|
$ |
(60,969 |
) |
|
$ |
(4,597 |
) |
|
$ |
(66,073 |
) |
|
Depreciation and
amortization |
|
4,381 |
|
|
|
9,853 |
|
|
|
9,146 |
|
|
|
20,647 |
|
|
Impairment
loss |
|
- |
|
|
|
8,191 |
|
|
|
- |
|
|
|
8,191 |
|
|
Movement in
allowance for doubtful accounts receivable |
|
(429 |
) |
|
|
21,368 |
|
|
|
83 |
|
|
|
23,958 |
|
|
(Earnings) loss
from equity-accounted investments |
|
(506 |
) |
|
|
1,247 |
|
|
|
(1,569 |
) |
|
|
(126 |
) |
|
Movement in
allowance for doubtful loans |
|
620 |
|
|
|
- |
|
|
|
620 |
|
|
|
- |
|
|
Interest on Cedar
Cellular note |
|
- |
|
|
|
(1,216 |
) |
|
|
- |
|
|
|
(1,372 |
) |
|
Impairment of
Cedar Cellular note |
|
- |
|
|
|
2,732 |
|
|
|
- |
|
|
|
2,732 |
|
|
Change in fair
value of equity securities |
|
- |
|
|
|
15,836 |
|
|
|
- |
|
|
|
15,836 |
|
|
Fair value
adjustment related to financial liabilities |
|
147 |
|
|
|
83 |
|
|
|
234 |
|
|
|
1 |
|
|
Interest
payable |
|
526 |
|
|
|
131 |
|
|
|
1,158 |
|
|
|
241 |
|
|
Facility fee
amortized |
|
- |
|
|
|
68 |
|
|
|
- |
|
|
|
155 |
|
|
Gain on disposal
of FIHRST |
|
(9,743 |
) |
|
|
- |
|
|
|
(9,743 |
) |
|
|
- |
|
|
Profit on disposal
of property, plant and equipment |
|
(49 |
) |
|
|
(139 |
) |
|
|
(203 |
) |
|
|
(266 |
) |
|
Stock-based
compensation charge |
|
436 |
|
|
|
598 |
|
|
|
823 |
|
|
|
1,185 |
|
|
Dividends received
from equity accounted investments |
|
380 |
|
|
|
454 |
|
|
|
1,448 |
|
|
|
454 |
|
|
Decrease in
accounts receivable, pre-funded social welfare grants receivable
and finance loans receivable |
|
8,767 |
|
|
|
18,753 |
|
|
|
3,101 |
|
|
|
28,755 |
|
|
(Increase)
Decrease in inventory |
|
(682 |
) |
|
|
(24 |
) |
|
|
(12,995 |
) |
|
|
2,161 |
|
|
Increase
(Decrease) in accounts payable and other payables |
|
3,132 |
|
|
|
(11,759 |
) |
|
|
(264 |
) |
|
|
(19,535 |
) |
|
(Decrease)
increase in taxes payable |
|
(2,244 |
) |
|
|
(7,007 |
) |
|
|
(956 |
) |
|
|
1,347 |
|
|
Decrease in
deferred taxes |
|
(117 |
) |
|
|
(3,436 |
) |
|
|
(205 |
) |
|
|
(7,070 |
) |
|
|
Net cash provided by
(used in) operating activities |
|
4,414 |
|
|
|
(5,236 |
) |
|
|
(13,919 |
) |
|
|
11,221 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows
from investing activities |
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures |
|
(827 |
) |
|
|
(2,547 |
) |
|
|
(3,451 |
) |
|
|
(5,665 |
) |
Proceeds from
disposal of property, plant and equipment |
|
90 |
|
|
|
212 |
|
|
|
303 |
|
|
|
486 |
|
Proceeds from
disposal of FIHRST |
|
10,895 |
|
|
|
- |
|
|
|
10,895 |
|
|
|
- |
|
Investment in
equity-accounted investments |
|
- |
|
|
|
(2,500 |
) |
|
|
(1,250 |
) |
|
|
(2,500 |
) |
Loan to
equity-accounted investment |
|
(612 |
) |
|
|
- |
|
|
|
(612 |
) |
|
|
- |
|
Repayment of loans
by equity-accounted investments |
|
- |
|
|
|
- |
|
|
|
4,268 |
|
|
|
- |
|
Acquisition of
intangible assets |
|
- |
|
|
|
(1,384 |
) |
|
|
- |
|
|
|
(1,384 |
) |
Investment in
MobiKwik |
|
- |
|
|
|
(1,056 |
) |
|
|
- |
|
|
|
(1,056 |
) |
Return on
investment |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
284 |
|
Net change in
settlement assets |
|
3,371 |
|
|
|
2,031 |
|
|
|
(10,138 |
) |
|
|
77,962 |
|
|
Net cash
provided by (used in) investing activities |
|
12,917 |
|
|
|
(5,244 |
) |
|
|
15 |
|
|
|
68,127 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows
from financing activities |
|
|
|
|
|
|
|
|
|
|
|
Proceeds from bank
overdraft |
|
207,876 |
|
|
|
221,582 |
|
|
|
391,550 |
|
|
|
306,237 |
|
Repayment of bank
overdraft |
|
(193,725 |
) |
|
|
(245,726 |
) |
|
|
(378,554 |
) |
|
|
(245,726 |
) |
Long-term
borrowings utilized |
|
- |
|
|
|
3,203 |
|
|
|
14,798 |
|
|
|
11,004 |
|
Repayment of long-term borrowings |
|
(11,313 |
) |
|
|
(13,551 |
) |
|
|
(11,313 |
) |
|
|
(23,811 |
) |
Guarantee fee |
|
- |
|
|
|
(258 |
) |
|
|
(148 |
) |
|
|
(394 |
) |
Finance lease
capital repayments |
|
(26 |
) |
|
|
- |
|
|
|
(52 |
) |
|
|
- |
|
Dividends paid to
non-controlling interest |
|
- |
|
|
|
(1,208 |
) |
|
|
- |
|
|
|
(2,937 |
) |
Net change in
settlement obligations |
|
(3,371 |
) |
|
|
(2,031 |
) |
|
|
10,138 |
|
|
|
(77,962 |
) |
|
Net cash
(used in) provided by financing activities |
|
(559 |
) |
|
|
(37,989 |
) |
|
|
26,419 |
|
|
|
(33,589 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash |
|
7,508 |
|
|
|
(1,823 |
) |
|
|
1,053 |
|
|
|
(2,772 |
) |
Net
increase (decrease) in cash and cash equivalents |
|
24,280 |
|
|
|
(50,292 |
) |
|
|
13,568 |
|
|
|
42,987 |
|
Cash and
cash equivalents – beginning of period |
|
110,799 |
|
|
|
183,333 |
|
|
|
121,511 |
|
|
|
90,054 |
|
Cash and
cash equivalents – end of period(1) |
$ |
135,079 |
|
|
$ |
133,041 |
|
|
$ |
135,079 |
|
|
$ |
133,041 |
|
(1) Cash, cash equivalents and restricted cash
as of December 31, 2019, includes restricted cash of approximately
$84.4 million related to cash withdrawn from the Company’s various
debt facilities to fund ATMs. This cash may only be used to fund
ATMs and is considered restricted as to use and therefore is
classified as restricted cash.
Net 1 UEPS Technologies, Inc.
Attachment A
Operating segment revenue, operating
(loss) income and operating (loss) margin:
Three months ended December 31, 2019 and
2018 and September 30, 2019
|
|
|
|
|
|
|
|
|
|
Change - actual |
Change – constantexchange rate(1) |
Key segmental data, in ’000, except margins |
|
|
Q2 '20 |
|
|
Q2 '19 |
|
|
Q1 '20 |
Q2 '20 vs Q2
'19 |
Q2 '20 vs Q1
'20 |
Q2 '20 vs Q2
'19 |
Q2 '20 vs Q1
'20 |
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South African
transaction processing |
|
$ |
20,350 |
|
|
$ |
21,970 |
|
|
$ |
19,399 |
|
(7 |
%) |
5 |
% |
(6 |
%) |
4 |
% |
|
International
transaction processing |
|
|
34,363 |
|
|
|
38,124 |
|
|
|
34,017 |
|
(10 |
%) |
1 |
% |
(8 |
%) |
(0 |
%) |
|
Financial
inclusion and applied technologies |
|
|
21,986 |
|
|
|
38,755 |
|
|
|
30,145 |
|
(43 |
%) |
(27 |
%) |
(42 |
%) |
(28 |
%) |
|
|
Continuing |
|
|
21,986 |
|
|
|
19,047 |
|
|
|
30,145 |
|
15 |
% |
(27 |
%) |
18 |
% |
(28 |
%) |
|
|
Discontinued |
|
|
- |
|
|
|
19,708 |
|
|
|
- |
|
nm |
nm |
nm |
nm |
|
|
|
Subtotal:
Operating segments |
|
|
76,699 |
|
|
|
98,849 |
|
|
|
83,561 |
|
(22 |
%) |
(8 |
%) |
(21 |
%) |
(9 |
%) |
|
|
|
Intersegment
eliminations |
|
|
(2,619 |
) |
|
|
(1,699 |
) |
|
|
(2,805 |
) |
54 |
% |
(7 |
%) |
57 |
% |
(8 |
%) |
|
|
|
|
Consolidated revenue |
|
|
74,080 |
|
|
|
97,150 |
|
|
|
80,756 |
|
(24 |
%) |
(8 |
%) |
(22 |
%) |
(9 |
%) |
|
|
|
|
|
Continuing |
|
|
74,080 |
|
|
|
77,442 |
|
|
|
80,756 |
|
(4 |
%) |
(8 |
%) |
(2 |
%) |
(9 |
%) |
|
|
|
|
|
Discontinued |
|
$ |
- |
|
|
$ |
19,708 |
|
|
$ |
- |
|
nm |
nm |
nm |
nm |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
(loss) income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South African
transaction processing |
|
$ |
(2,981 |
) |
|
$ |
(11,830 |
) |
|
$ |
(3,385 |
) |
(75 |
%) |
(12 |
%) |
(74 |
%) |
(13 |
%) |
|
International
transaction processing |
|
|
2,811 |
|
|
|
(4,043 |
) |
|
|
3,790 |
|
nm |
(26 |
%) |
nm |
(27 |
%) |
|
Financial
inclusion and applied technologies |
|
|
(878 |
) |
|
|
(18,538 |
) |
|
|
1,501 |
|
(95 |
%) |
nm |
(95 |
%) |
nm |
|
|
Continuing |
|
|
(878 |
) |
|
|
(26,967 |
) |
|
|
1,501 |
|
(97 |
%) |
nm |
(97 |
%) |
nm |
|
|
Discontinued |
|
|
- |
|
|
|
8,429 |
|
|
|
- |
|
nm |
nm |
nm |
nm |
|
|
|
Subtotal:
Operating segments |
|
|
(1,048 |
) |
|
|
(34,411 |
) |
|
|
1,906 |
|
(97 |
%) |
nm |
(97 |
%) |
nm |
|
|
|
Corporate/Eliminations |
|
|
(5,806 |
) |
|
|
(8,664 |
) |
|
|
(4,640 |
) |
(33 |
%) |
25 |
% |
(32 |
%) |
24 |
% |
|
|
|
|
Continuing |
|
|
(5,806 |
) |
|
|
(6,061 |
) |
|
|
(4,640 |
) |
(4 |
%) |
25 |
% |
(2 |
%) |
24 |
% |
|
|
|
|
Discontinued |
|
|
- |
|
|
|
(2,603 |
) |
|
|
- |
|
nm |
nm |
nm |
nm |
|
|
|
|
|
Consolidated
operating (loss) income |
|
|
(6,854 |
) |
|
|
(43,075 |
) |
|
|
(2,734 |
) |
(84 |
%) |
151 |
% |
(84 |
%) |
148 |
% |
|
|
|
|
|
|
Continuing |
|
|
(6,854 |
) |
|
|
(48,901 |
) |
|
|
(2,734 |
) |
(86 |
%) |
151 |
% |
(86 |
%) |
148 |
% |
|
|
|
|
|
|
Discontinued |
|
$ |
- |
|
|
$ |
5,826 |
|
|
$ |
- |
|
nm |
nm |
nm |
nm |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
(loss) income margin (%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South African
transaction processing |
|
|
(14.6 |
%) |
|
|
(53.8 |
%) |
|
|
(17.4 |
%) |
|
|
|
|
|
International
transaction processing |
|
|
8.2 |
% |
|
|
(10.6 |
%) |
|
|
11.1 |
% |
|
|
|
|
|
Financial
inclusion and applied technologies |
|
|
(4.0 |
%) |
|
|
(47.8 |
%) |
|
|
5.0 |
% |
|
|
|
|
|
|
Continuing |
|
|
(4.0 |
%) |
|
|
(141.6 |
%) |
|
|
5.0 |
% |
|
|
|
|
|
|
Discontinued |
|
|
nm |
|
|
42.8 |
% |
|
|
nm |
|
|
|
|
|
|
|
Consolidated operating margin |
|
|
(9.3 |
%) |
|
|
(44.3 |
%) |
|
|
(3.4 |
%) |
|
|
|
|
|
|
|
|
Continuing |
|
|
(9.3 |
%) |
|
|
(63.1 |
%) |
|
|
(3.4 |
%) |
|
|
|
|
|
|
|
|
Discontinued |
|
|
nm |
|
|
29.6 |
% |
|
|
nm |
|
|
|
|
(1) – This information shows
what the change in these items would have been if the USD/ ZAR
exchange rate that prevailed during Q2 2020 also prevailed during
Q2 2019 and Q1 2020.
Six months ended December 31, 2019 and
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change - actual |
Change – constantexchange rate(1) |
Key segmental data, in ’000, except margins |
|
|
F2020 |
|
|
F2019 |
|
F2020 vsF2019 |
F2020
vs F2019 |
Revenue: |
|
|
|
|
|
|
|
|
|
|
South African
transaction processing |
|
$ |
39,749 |
|
|
$ |
59,719 |
|
|
(33 |
%) |
(33 |
%) |
|
International
transaction processing |
|
|
68,380 |
|
|
|
77,511 |
|
|
(12 |
%) |
(11 |
%) |
|
Financial
inclusion and applied technologies |
|
|
52,131 |
|
|
|
91,961 |
|
|
(43 |
%) |
(43 |
%) |
|
|
Continuing |
|
|
52,131 |
|
|
|
53,466 |
|
|
(2 |
%) |
(2 |
%) |
|
|
Discontinued |
|
|
- |
|
|
|
38,495 |
|
|
nm |
nm |
|
|
|
Subtotal:
Operating segments |
|
|
160,260 |
|
|
|
229,191 |
|
|
(30 |
%) |
(30 |
%) |
|
|
|
Intersegment
eliminations |
|
|
(5,424 |
) |
|
|
(6,157 |
) |
|
(12 |
%) |
(12 |
%) |
|
|
|
|
Consolidated revenue |
|
|
154,836 |
|
|
|
223,034 |
|
|
(31 |
%) |
(30 |
%) |
|
|
|
|
|
Continuing |
|
|
154,836 |
|
|
|
184,539 |
|
|
(16 |
%) |
(16 |
%) |
|
|
|
|
|
Discontinued |
|
$ |
- |
|
|
$ |
38,495 |
|
|
nm |
nm |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
(loss) income: |
|
|
|
|
|
|
|
|
|
|
South African
transaction processing |
|
$ |
(6,366 |
) |
|
$ |
(15,343 |
) |
|
(59 |
%) |
(58 |
%) |
|
International
transaction processing |
|
|
6,601 |
|
|
|
(1,281 |
) |
|
nm |
nm |
|
Financial
inclusion and applied technologies |
|
|
623 |
|
|
|
(7,236 |
) |
|
nm |
nm |
|
|
Continuing |
|
|
623 |
|
|
|
(23,497 |
) |
|
nm |
nm |
|
|
Discontinued |
|
|
- |
|
|
|
16,261 |
|
|
nm |
nm |
|
|
|
Subtotal:
Operating segments |
|
|
858 |
|
|
|
(23,860 |
) |
|
nm |
nm |
|
|
|
Corporate/Eliminations |
|
|
(10,446 |
) |
|
|
(18,319 |
) |
|
(43 |
%) |
(43 |
%) |
|
|
|
|
Continuing |
|
|
(10,446 |
) |
|
|
(13,066 |
) |
|
(20 |
%) |
(20 |
%) |
|
|
|
|
Discontinued |
|
|
- |
|
|
|
(5,253 |
) |
|
nm |
nm |
|
|
|
|
|
Consolidated
operating (loss) income |
|
|
(9,588 |
) |
|
|
(42,179 |
) |
|
(77 |
%) |
(77 |
%) |
|
|
|
|
|
|
Continuing |
|
|
(9,588 |
) |
|
|
(53,187 |
) |
|
(82 |
%) |
(82 |
%) |
|
|
|
|
|
|
Discontinued |
|
$ |
- |
|
|
$ |
11,008 |
|
|
nm |
nm |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
(loss) income margin (%) |
|
|
|
|
|
|
|
|
|
|
South African
transaction processing |
|
|
(16.0 |
%) |
|
|
(25.7 |
%) |
|
|
|
|
International
transaction processing |
|
|
9.7 |
% |
|
|
(1.7 |
%) |
|
|
|
|
Financial
inclusion and applied technologies |
|
|
1.2 |
% |
|
|
(7.9 |
%) |
|
|
|
|
|
Continuing |
|
|
1.2 |
% |
|
|
(43.9 |
%) |
|
|
|
|
|
Discontinued |
|
|
nm |
|
|
42.2 |
% |
|
|
|
|
|
|
Consolidated operating margin |
|
|
(6.2 |
%) |
|
|
(18.9 |
%) |
|
|
|
|
|
|
|
Continuing |
|
|
(6.2 |
%) |
|
|
(28.8 |
%) |
|
|
|
|
|
|
|
Discontinued |
|
|
nm |
|
|
28.6 |
% |
|
|
|
(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 from equity-accounted
investments:
The table below presents the relative earnings
(loss) from our equity-accounted investments:
|
|
|
Q2 2020 |
|
|
Q2 2019 |
|
% change |
|
|
F2020 |
|
|
F2019 |
|
% change |
DNI(1) |
$ |
380 |
|
|
$ |
- |
|
|
nm |
|
$ |
1,108 |
|
|
$ |
- |
|
|
nm |
|
Share of net income |
|
1,650 |
|
|
|
- |
|
|
nm |
|
|
3,113 |
|
|
|
- |
|
|
nm |
|
Amortization of intangible
assets, net of deferred tax |
|
(465 |
) |
|
|
- |
|
|
nm |
|
|
(931 |
) |
|
|
- |
|
|
nm |
|
Impairment |
|
(805 |
) |
|
|
- |
|
|
nm |
|
|
(1,074 |
) |
|
|
- |
|
|
nm |
Bank Frick |
|
494 |
|
|
|
(1,217 |
) |
|
nm |
|
|
469 |
|
|
|
(1,805 |
) |
|
nm |
|
Share of net income |
|
636 |
|
|
|
402 |
|
|
58 |
% |
|
|
755 |
|
|
|
564 |
|
|
34 |
% |
|
Amortization of intangible
assets, net of deferred tax |
|
(142 |
) |
|
|
(141 |
) |
|
1 |
% |
|
|
(286 |
) |
|
|
(285 |
) |
|
0 |
% |
|
Other |
|
- |
|
|
|
(1,478 |
) |
|
nm |
|
|
- |
|
|
|
(2,084 |
) |
|
nm |
Finbond |
|
- |
|
|
|
- |
|
|
nm |
|
|
491 |
|
|
|
1,875 |
|
|
(74 |
%) |
Other |
|
(368 |
) |
|
|
(74 |
) |
|
397 |
% |
|
|
(499 |
) |
|
|
114 |
|
|
nm |
|
Earnings (Loss) from
equity-accounted investments |
$ |
506 |
|
|
$ |
(1,291 |
) |
|
nm |
|
$ |
1,569 |
|
|
$ |
184 |
|
|
753 |
% |
(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. 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)
income to (negative) EBITDA and adjusted (negative)
EBITDA:
Three and six months ended December 31,
2019 and 2018
|
|
|
|
|
Three months endedDecember 31, |
|
Six months endedDecember 31, |
|
|
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Operating
loss - GAAP |
(6,854 |
) |
|
(48,901 |
) |
|
(9,588 |
) |
|
(53,187 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization |
4,381 |
|
|
7,191 |
|
|
9,146 |
|
|
15,048 |
|
|
Impairment
loss |
- |
|
|
8,191 |
|
|
- |
|
|
8,191 |
|
|
|
Negative
EBITDA |
(2,473 |
) |
|
(33,519 |
) |
|
(442 |
) |
|
(29,948 |
) |
|
|
|
Transaction
costs |
1,770 |
|
|
300 |
|
|
2,576 |
|
|
1,850 |
|
|
|
|
|
Adjusted (negative)
EBITDA |
(703 |
) |
|
(33,219 |
) |
|
2,134 |
|
|
(28,098 |
) |
Reconciliation of GAAP net (loss) income
and (loss) earnings per share, basic, to fundamental net (loss)
income and (loss) earnings per share, basic:
Three months ended December 31, 2019 and
2018
|
Net Income (USD '000) |
|
(L) EPS, basic (USD) |
|
Net Income (ZAR '000) |
|
(L)EPS, basic (ZAR) |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
GAAP |
(205 |
) |
|
(63,941 |
) |
|
(0.00 |
) |
|
(1.13 |
) |
|
(2,993 |
) |
|
(915,866 |
) |
|
(0.05 |
) |
|
(16.11 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on disposal of
FIHRST |
(9,743 |
) |
|
- |
|
|
|
|
|
|
(142,269 |
) |
|
- |
|
|
|
|
|
Intangible asset amortization,
net |
1,437 |
|
|
4,510 |
|
|
|
|
|
|
20,972 |
|
|
64,609 |
|
|
|
|
|
Stock-based compensation
charge |
436 |
|
|
598 |
|
|
|
|
|
|
6,367 |
|
|
8,566 |
|
|
|
|
|
Transaction costs |
1,770 |
|
|
300 |
|
|
|
|
|
|
25,846 |
|
|
4,297 |
|
|
|
|
|
Intangible asset amortization,
net related to equity accounted investments |
607 |
|
|
141 |
|
|
|
|
|
|
8,864 |
|
|
2,020 |
|
|
|
|
|
Impairment loss |
- |
|
|
8,191 |
|
|
|
|
|
|
- |
|
|
117,325 |
|
|
|
|
|
Intangible asset amortization,
net related to non-controlling interest |
- |
|
|
(909 |
) |
|
|
|
|
|
- |
|
|
(13,020 |
) |
|
|
|
|
Facility fees for debt |
- |
|
|
68 |
|
|
|
|
|
|
- |
|
|
974 |
|
|
|
|
|
Fundamental |
(5,698 |
) |
|
(51,042 |
) |
|
(0.10 |
) |
|
(0.90 |
) |
|
(83,213 |
) |
|
(731,095 |
) |
|
(1.47 |
) |
|
(12.86 |
) |
Six months ended December 31, 2019 and
2018
|
Net Income (USD '000) |
|
(L) EPS, basic (USD) |
|
Net Income (ZAR '000) |
|
(L)EPS, basic (ZAR) |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
GAAP |
(4,597 |
) |
|
(69,140 |
) |
|
(0.08 |
) |
|
(1.22 |
) |
|
(66,206 |
) |
|
(991,314 |
) |
|
(1.17 |
) |
|
(17.46 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on disposal of
FIHRST |
(9,743 |
) |
|
- |
|
|
|
|
|
|
(140,322 |
) |
|
- |
|
|
|
|
|
Intangible asset amortization,
net |
2,838 |
|
|
9,060 |
|
|
|
|
|
|
40,863 |
|
|
129,886 |
|
|
|
|
|
Stock-based compensation
charge |
823 |
|
|
1,185 |
|
|
|
|
|
|
11,853 |
|
|
16,990 |
|
|
|
|
|
Transaction costs |
2,576 |
|
|
1,850 |
|
|
|
|
|
|
37,100 |
|
|
26,525 |
|
|
|
|
|
Intangible asset amortization,
net related to equity accounted investments |
1,217 |
|
|
285 |
|
|
|
|
|
|
17,528 |
|
|
4,086 |
|
|
|
|
|
Impairment loss |
- |
|
|
8,191 |
|
|
|
|
|
|
- |
|
|
117,441 |
|
|
|
|
|
Intangible asset amortization,
net related to non-controlling interest |
- |
|
|
(1,815 |
) |
|
|
|
|
|
- |
|
|
(26,023 |
) |
|
|
|
|
Facility fees for debt |
- |
|
|
155 |
|
|
|
|
|
|
- |
|
|
2,222 |
|
|
|
|
|
Fundamental |
(6,886 |
) |
|
(50,229 |
) |
|
(0.12 |
) |
|
(0.88 |
) |
|
(99,184 |
) |
|
(720,187 |
) |
|
(1.75 |
) |
|
(12.68 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 December 31, 2019 and
2018
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
Net loss
(USD’000) |
(205 |
) |
|
(63,941 |
) |
|
Adjustments: |
|
|
|
|
|
Gain on disposal of
FIHRST |
(9,743 |
) |
|
- |
|
|
|
Impairment loss |
- |
|
|
8,191 |
|
|
|
Profit on sale of property,
plant and equipment |
(49 |
) |
|
(139 |
) |
|
|
Tax effects on above |
14 |
|
|
39 |
|
|
|
|
|
|
|
|
Net loss used to
calculate headline loss (USD’000) |
(9,983 |
) |
|
(55,850 |
) |
|
|
|
|
|
|
|
Weighted average
number of shares used to calculate net loss per share basic loss
and headline loss per share basic loss (‘000) |
56,568 |
|
|
56,834 |
|
|
|
|
|
|
|
|
Weighted average
number of shares used to calculate net loss per share diluted loss
and headline loss per share diluted loss (‘000) |
56,568 |
|
|
56,855 |
|
|
|
|
|
|
|
|
Headline loss per
share: |
|
|
|
|
|
Basic, in USD |
(0.18 |
) |
|
(0.98 |
) |
|
|
Diluted, in USD |
(0.18 |
) |
|
(0.98 |
) |
|
|
|
|
|
|
|
|
|
Six months ended December 31, 2019 and
2018
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
Net loss
(USD’000) |
(4,597 |
) |
|
(69,140 |
) |
|
Adjustments: |
|
|
|
|
|
Gain on disposal of
FIHRST |
(9,743 |
) |
|
- |
|
|
|
Impairment loss |
- |
|
|
8,191 |
|
|
|
Profit on sale of property,
plant and equipment |
(203 |
) |
|
(266 |
) |
|
|
Tax effects on above |
57 |
|
|
74 |
|
|
|
|
|
|
|
|
Net loss used to
calculate headline loss (USD’000) |
(14,486 |
) |
|
(61,141 |
) |
|
|
|
|
|
|
|
Weighted average
number of shares used to calculate net loss per share basic loss
and headline loss per share basic loss (‘000) |
56,568 |
|
|
56,778 |
|
|
|
|
|
|
|
|
Weighted average
number of shares used to calculate net loss per share diluted loss
and headline loss per share diluted loss (‘000) |
56,568 |
|
|
56,814 |
|
|
|
|
|
|
|
|
Headline loss per
share: |
|
|
|
|
|
Basic, in USD |
(0.26 |
) |
|
(1.08 |
) |
|
|
Diluted, in USD |
(0.26 |
) |
|
(1.08 |
) |
|
|
|
|
|
|
|
|
|
Calculation of the denominator for headline diluted loss
per share
|
|
|
Q2 2020 |
|
Q2 2019 |
|
F2020 |
|
F2019 |
|
|
|
|
|
|
|
|
|
|
|
|
Basic
weighted-average common shares outstanding and unvested restricted
shares expected to vest under GAAP |
56,568 |
|
56,834 |
|
56,568 |
|
56,778 |
|
|
Effect of dilutive
securities under GAAP |
- |
|
21 |
|
- |
|
36 |
|
|
|
Denominator for headline
diluted (loss) earnings per share |
56,568 |
|
56,855 |
|
56,568 |
|
56,814 |
|
|
|
|
|
|
|
|
|
|
|
|
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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