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Net 1 Reports Fourth Quarter and Year End 2020 Results

JOHANNESBURG, South Africa, Sept. 10, 2020 (GLOBE NEWSWIRE) -- 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, Net1s 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 CEO
On August 5, 2020, we announced that, after 22 years with our company, Herman G. Kotzé will be stepping down on September 30, 2020, as Net1s CEO and director. Alex Smith will take over as the interim CEO upon Mr. Kotzés 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 000s
(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 (000s)

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 000s
(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 (000s)

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 MeasuresEBITDA 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 investors 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 Chopra
Group Vice President, Investor Relations
Phone: +1 917-767-6722
Email: dchopra@net1.com

Media Relations Contact:
Bridget von Holdt
Business Director BCW
Phone: +27-82-610-0650
Email: 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
vs
F2019

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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