NET1 SHARE INFO
Investor Relations

News Release

Printer Friendly Version  View printer-friendly version

« Back

Net 1 Reports Fourth Quarter and Year End 2021 Results

JOHANNESBURG, South Africa, Sept. 13, 2021 (GLOBE NEWSWIRE) -- Net 1 UEPS Technologies, Inc. (Nasdaq: UEPS; JSE: NT1) today released results for the fourth quarter and year ended June 30, 2021.

Financial Highlights:

  • Net increase of approximately 23,000 EasyPay Everywhere (EPE) account holders during Q4 2021, and an additional 61,000 – combined – in July and August of 2021;
  • Non-cash increase of $23.4 million in Q4 2021, before tax effect, in the fair value of investment in MobiKwik;
  • At June 30, 2021, unrestricted cash of $199 million and no debt;
  • Revenue of $34.5 million in Q4 2021, an increase of 20% from Q3 2021;
  • Operating loss of $(13.6) million in Q4 2021;
  • GAAP EPS of $0.03 and Fundamental EPS loss of $(0.18) in Q4 2021; and
  • Adjusted EBITDA loss of $8.2 million in Q4 2021, a $4.6 million improvement from Q3 2021 following the closure of IPG.

“Fiscal Year 2021 was a challenging year for Net 1, South Africa and the global economy - but it has also been a productive period for the company,” said Chris Meyer, Group CEO of Net 1. “Our core purpose is to improve people’s lives by bringing financial inclusion to South Africa’s underserved consumers and helping small businesses access the financial services they need to prosper. We believe we have the right team, strategy, technology and operations in place to position the Company to effectively serve the large addressable market in South Africa and provide growth for all stakeholders.”

Summary Financial Metrics

    Q4 2021   Q4 2020   Q3 2021   Q4 ’21 vs
Q4 ’20

  Q4 ’21vs
Q3 ’21

  Q4 ’21 vs
Q4 ’20

  Q4 ’21 vs
Q3 ’21

        (as restated)(1)            
(All figures in USD ‘000s except per share data) USD ‘000’s
(except per share data)
  % change in USD  
% change in ZAR
 
Revenue 34,517     24,551     28,828     41 %   20 %   15 %   13 %
GAAP operating loss (13,600 )   (13,180 )   (14,292 )   3 %   (5 %)   (15 %)   (10 %)
Adjusted EBITDA (loss)(2) (8,208 )   (11,868 )   (12,823 )   (31 %)   (36 %)   (43 %)   (39 %)
GAAP earnings (loss) per share ($) 0.03     (0.68 )   (0.11 )   nm   nm   nm   nm
Fundamental loss per share ($)(2) (0.18 )   (0.21 )   (0.24 )   (14 %)   (25 %)   (30 %)   (29 %)
Fully-diluted shares outstanding (‘000’s) 56,937     57,119     56,921     (0 %)   0 %   nm   nm
Average period USD/ ZAR exchange rate 14.17     17.28     14.96     (18 %)   (5 %)   nm   nm


    F2021   F2020   F2021 vs
F2020

  F2021 vs
F2020

        (as restated)(1)    
(All figures in USD ‘000s except per share data) USD ‘000’s
(except per share data)
% change
in USD
  % change
in ZAR
Revenue 130,786     144,299     (9 %)   (19 %)
GAAP operating loss (53,872 )   (44,248 )   22 %   9 %
Adjusted EBITDA (loss)(2) (42,907 )   (29,354 )   46 %   31 %
GAAP earnings (loss) per share ($) (0.67 )   (1.37 )   (51 %)   (56 %)
  Continuing (0.67 )   (1.70 )   (61 %)   (65 %)
  Discontinued -     0.33     nm   nm
Fundamental loss per share ($)(2) (0.87 )   (1.02 )   (15 %)   (24 %)
Fully-diluted shares outstanding (‘000’s) 56,898     56,764     0 %   nm
Average period USD/ ZAR exchange rate 15.72     17.57     (11 %)   nm

(1) 2020 has been restated to correct an error with respect to the recognition of certain revenue and related cost of goods sold, IT processing, servicing and support. The financial information for the three and twelve months ended June 30, 2020, has been restated with the effect of decreasing revenue by $1.4 million and $6.7 million, respectively. Refer to Note 1 to our audited consolidated financial statements.

(2) Adjusted EBITDA (loss), fundamental loss and fundamental loss per share are non-GAAP measures and are described below under “Use of Non-GAAP Measures—EBITDA and Adjusted EBITDA, and —Fundamental net (loss) income and fundamental (loss) earnings per share.” See Attachment B for a reconciliation of GAAP operating loss to EBITDA (loss) and Adjusted EBITDA (loss), and GAAP net income (loss) to fundamental net loss and loss per share.

Business update related to COVID-19 pandemic

Our business has been, and continues to be, impacted by government restrictions and quarantines related to COVID-19. South Africa operates with a five-level COVID-19 alert system, with Level 1 being the least restrictive and Level 5 being the most restrictive. South Africa is currently at adjusted Level 2, and was at adjusted Level 3 until September 12, 2021, which had a limited impact on our businesses during Q4 2021. The South African government commenced its vaccination program in early calendar 2021, with a stated goal of vaccinating 67% of the South African population by the end of the calendar year.

Factors impacting comparability of our Q4 2021 and Q4 2020 results

  • Higher revenue: Our revenues increased 15% in ZAR primarily due to higher volume-driven transaction fees lending revenues and hardware sales, which were partially offset by fewer prepaid airtime sales;
  • Ongoing operating losses: Operating loss is comparable with Q4 2020, however with different components. Q4 2021 includes a $4.0 million allowance for doubtful loans receivable from equity-accounted investments and no IPG losses, whilst, Q4 2020 operating losses included the effects of pandemic-related government restrictions in South Africa and an inventory adjustment of $1.3 million as well as IPG losses of $4.3 million.
  • Non-cash increase in fair value of MobiKwik: We recorded a non-cash fair value gain during Q4 2021 of $23.4 million related to the change in fair value of MobiKwik; and
  • Foreign exchange movements: The U.S. dollar was 18.0% weaker against the ZAR during Q4 2021, which impacted our reported results.

Results of Operations by Segment and Liquidity

Processing

Segment revenue, excluding IPG, was $21.2 million in Q4 2021, up 12% compared with Q4 2020 and up 7% compared with Q3 2021 on a constant currency basis. Excluding IPG, segment revenue increased primarily due to an increase in volume-driven transaction fees due to lower trading activity in Q4, 2020, following government-imposed lockdown restrictions, which was partially offset by fewer prepaid airtime sales and a reduction in volume-driven transaction fees. Excluding IPG, Processing’s operating loss for Q4 2021, has been impacted by an increase in transaction-based and employee costs, which was partially offset by the lower cost of prepaid airtime sales. Q4 2020 also includes a $1.3 million inventory write-down related to Cell C prepaid airtime. Our operating loss margin (calculated as operating (loss) income divided by revenue) for Q4 2021 and 2020 was (27.3%) and (61.6%), respectively. Excluding IPG, our operating loss margin for the Processing segment was (27.4%) and (37.6%) during Q4 2021 and 2020, respectively. Excluding the Cell C prepaid airtime write-down, our operating loss and operating loss margin for the Processing segment was $(8.8) million and (53.6%), respectively, during Q4 2020.

Financial services

Segment revenue was $10.8 million in Q4 2021, up 1% on a constant currency basis compared with both Q4 2020 and Q3 2021. Segment revenue was affected by higher lending revenue, which was partially offset by lower account fees. The increase in operating loss is primarily due to the lower account fee revenue and the increase in insurance-related claims experienced this quarter attributed to the second wave of the pandemic. Our operating loss margin for Q4 2021 and 2020 was (26.5%) and (11.6%), respectively.

Technology

Segment revenue was $4.9 million in Q4 2021, up 108%, compared with Q4 2020, and up 129% compared with Q3 2021 on a constant currency basis. Segment revenue increased due to a higher volume of hardware sales from one product line compared to the prior period. The operating loss for Q4 2021 was impacted by various non-trading adjustments. Our operating (loss) income margin for the Technology segment was (7.3%) and 7.0% for Q4 2021 and 2020, respectively.

Corporate/eliminations

Our corporate expenses for Q4 2021 were higher than Q4 2020 primarily due to an allowance for doubtful loans receivables of $4.0 million, which was partially offset by the net reversal of stock-based compensation charges of $0.5 million.

Cash flow and liquidity

At June 30, 2021, our cash and cash equivalents were $198.6 million and comprised of U.S. dollar-denominated balances of $169.8 million, ZAR-denominated balances of ZAR 0.4 billion ($26.5 million), and other currency deposits, primarily Botswana pula, of $2.3 million, all amounts translated at exchange rates applicable as of June 30, 2021. The decrease in our unrestricted cash balances from June 30, 2020, was primarily due to the payment of Federal income taxes, weak trading activities and an increase in our lending book, which was partially offset by the receipt of the outstanding proceeds related to the sale of our Korean business, receipt of proceeds related to the disposal of our interest in Bank Frick and the receipt of the outstanding loan related to the disposal of our remaining interest in DNI.

Excluding the impact of income taxes, cash used in operating activities during Q4 2021 was impacted by the cash losses incurred by our operations. Capital expenditures for Q4 2021 and 2020 were $0.3 million and $1.4 million, respectively.

Conference Call

We will host a conference call to review these results on September 14, 2021, 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.

Participants are now able to pre-register for the September 14, 2021, conference call by navigating to https://www.diamondpass.net/9817456. Participants utilizing this pre-registration service will receive their dial-in number upon registration.

Use of Non-GAAP Measures

U.S. securities laws require that when we publish any non-GAAP measures, we disclose the reason for using these non-GAAP measures and provide reconciliations to the most directly comparable GAAP measures. The presentation of EBITDA, adjusted EBITDA, fundamental net (loss) income and fundamental (loss) earnings per share and headline (loss) earnings per share are non-GAAP measures.

EBITDA and adjusted EBITDA

Earnings before interest, tax, depreciation and amortization (“EBITDA”) is GAAP operating (loss) income adjusted for depreciation and amortization. Adjusted EBITDA is EBITDA adjusted for costs related to acquisitions and transactions consummated or ultimately not pursued and allowances for doubtful loans to equity-accounted investments.

Fundamental net (loss) income and fundamental (loss) earnings per share

Fundamental net (loss) income and (loss) earnings per share is GAAP net (loss) income and (loss) earnings per share adjusted for the amortization of acquisition-related intangible assets (net of deferred taxes), stock-based compensation charges, and unusual non-recurring items, including allowance for doubtful loans to equity-accounted investments, costs related to acquisitions and transactions consummated or ultimately not pursued.

Fundamental net (loss) income and (loss) earnings per share for fiscal 2021 also includes adjustments related to changes in the fair value of equity securities (net of deferred tax), loss on disposal of equity-accounted investments, impairment losses related to our equity-accounted investments and the deferred tax liability reversal related to the impairment of the equity-accounted investment, and fiscal 2020 also includes an termination fee paid to cancel the Bank Frick option, impairment losses related to our equity-accounted investments, the gain related to the disposal of our Korean business, the gain related to the disposal of FIHRST, the loss related to the deconsolidation of CPS, and interest related to SASSA implementation costs refund.

Management believes that the EBITDA, adjusted EBITDA, fundamental net (loss) income and (loss) earnings per share metrics enhance its own evaluation, as well as an investor’s understanding, of our financial performance. Attachment B presents the reconciliation between GAAP operating income and EBITDA and adjusted EBITDA; and GAAP net (loss) income and (loss) earnings per share and fundamental net (loss) income and (loss) earnings per share.

Headline (loss) earnings per share (“H(L)EPS”)

The inclusion of H(L)EPS in this press release is a requirement of our listing on the JSE. H(L)EPS basic and diluted is calculated using net (loss) income which has been determined based on GAAP. Accordingly, this may differ to the headline (loss) earnings per share calculation of other companies listed on the JSE as these companies may report their financial results under a different financial reporting framework, including but not limited to, International Financial Reporting Standards.

H(L)EPS basic and diluted is calculated as GAAP net (loss) income adjusted for the impairment losses related to our equity-accounted investments, loss on disposal of equity-accounted investments, the gain related to the disposal of our Korean business, the gain on disposal of FIHRST, 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 financial technology company that utilizes its proprietary banking and payment technology to deliver on its mission of financial inclusion through the distribution of low-cost financial and value-added services to underserved consumers and small businesses in Southern Africa, which represents a significant segment of these economies. The Company also provides transaction processing services, including being a payment processor and bill payment platform in South Africa. Net1 leverages its strategic investments to further expand its product offerings or to enter new markets.

Net1 has a primary listing on NASDAQ (NasdaqGS: UEPS) and a secondary listing on the Johannesburg Stock Exchange (JSE: NT1). Visit www.net1.com for additional information about Net1.

Forward-Looking Statements

This announcement contains forward-looking statements that involve known and unknown risks and uncertainties. A discussion of various factors that may cause our actual results, levels of activity, performance or achievements to differ materially from those expressed in such forward-looking statements are included in our filings with the Securities and Exchange Commission. We undertake no obligation to revise any of these statements to reflect future events.

Investor Relations Contact:
Dara Dierks
Managing Director – ICR
Email: net1IR@icrinc.com

Media Relations Contact:
Bridget von Holdt
Co-Market Leader | MD – BCW
Phone: +27-82-610-0650
Email: Bridget.vonholdt@bcw-global.com


NET 1 UEPS TECHNOLOGIES, INC.
Condensed Consolidated Statements of Operations
                Unaudited   (A)
                Three months ended   Year ended
                June 30,   June 30,
                2021   2020   2021   2020
                    (as restated)(R)       (as restated)(R)
                (In thousands)   (In thousands)
REVENUE   $ 34,517     $ 24,551     $ 130,786     $ 144,299  
EXPENSE                        
  Cost of goods sold, IT processing, servicing and support     22,353       20,973       96,248       102,308  
  Selling, general and administration     24,546       15,762       84,063       75,256  
  Depreciation and amortization     1,218       996       4,347       4,647  
  Impairment loss     -       -       -       6,336  
OPERATING LOSS     (13,600 )     (13,180 )     (53,872 )     (44,248 )
CHANGE IN FAIR VALUE OF EQUITY SECURITIES     23,362       -       49,304       -  
LOSS ON DISPOSAL OF EQUITY-ACCOUNTED INVESTMENT - BANK FRICK     -       -       472       -  
LOSS ON DISPOSAL OF EQUITY-ACCOUNTED INVESTMENT     -       -       13       -  
GAIN ON DISPOSAL OF FIHRST     -       -       -       9,743  
LOSS ON DISPOSAL OF DNI     -       1,010       -       1,010  
LOSS ON DECONSOLIDATION OF CPS     -       7,148       -       7,148  
TERMINATION FEE PAID TO BANK FRICK     -       17,517       -       17,517  
INTEREST INCOME     482       790       2,416       2,805  
INTEREST EXPENSE     814       1,279       2,982       7,641  
NET INCOME (LOSS) BEFORE INCOME TAX EXPENSE     9,430       (39,344 )     (5,619 )     (65,016 )
INCOME TAX EXPENSE     3,011       339       7,560       2,656  
NET INCOME (LOSS) BEFORE (LOSS) EARNINGS FROM EQUITY-ACCOUNTED INVESTMENTS     6,419       (39,683 )     (13,179 )     (67,672 )
(LOSS) EARNINGS FROM EQUITY-ACCOUNTED INVESTMENTS     (4,780 )     1,082       (24,878 )     (29,542 )
NET INCOME (LOSS) FROM CONTINUING OPERATIONS     1,639       (38,601 )     (38,057 )     (97,214 )
NET INCOME FROM DISCONTINUED OPERATIONS     -       -       -       6,402  
(LOSS) GAIN FROM DISPOSAL OF DISCONTINUED OPERATION, net of tax     -       (279 )     -       12,454  
NET INCOME (LOSS)     1,639       (38,880 )     (38,057 )     (78,358 )
NET INCOME (LOSS) ATTRIBUTABLE TO NET1     1,639       (38,880 )     (38,057 )     (78,358 )
  Continuing     1,639       (38,601 )     (38,057 )     (97,214 )
  Discontinued   $ -     $ (279 )   $ -     $ 18,856  
Net earnings (loss) per share, in United States dollars:                        
Basic earnings (loss) attributable to Net1 shareholders   $ 0.03     $ (0.68 )   $ (0.67 )   $ (1.37 )
  Continuing   $ 0.03     $ (0.68 )   $ (0.67 )   $ (1.70 )
  Discontinued   $ -     $ (0.00 )   $ -     $ 0.33  
Diluted earnings (loss) attributable to Net1 shareholders   $ 0.03     $ (0.69 )   $ (0.67 )   $ (1.37 )
  Continuing   $ 0.03     $ (0.69 )   $ (0.67 )   $ (1.70 )
  Discontinued   $ -     $ (0.00 )   $ -     $ 0.33  

(R) 2020 has been restated to correct an error with respect to the recognition of certain revenue and related cost of goods sold, IT processing, servicing and support. The financial information for the three and twelve months ended June 30, 2020, has been restated with the effect of decreasing revenue by $1.4 million and $6.7 million, respectively.
(A) Derived from audited consolidated financial statements.


NET 1 UEPS TECHNOLOGIES, INC.
Consolidated Balance Sheets
            (A)   (A)
            June 30,   June 30,
            2021
  2020
            (In thousands, except share data)
          ASSETS          
CURRENT ASSETS          
  Cash and cash equivalents $ 198,572     $ 217,671  
  Restricted cash   25,193       14,814  
  Accounts receivable, net of allowance of - 2021: $267; 2020: $253 and other receivables   26,583       43,068  
  Finance loans receivable, net of allowance of - 2021: $2,349; 2020: $7,658   21,142       15,879  
  Inventory   22,361       19,860  
    Total current assets before settlement assets   293,851       311,292  
      Settlement assets   466       8,014  
        Total current assets   294,317       319,306  
PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of - 2021: $38,535; 2020: $29,524   7,492       6,656  
OPERATING LEASE RIGHT-OF-USE   4,519       5,395  
EQUITY-ACCOUNTED INVESTMENTS   10,004       65,836  
GOODWILL   29,153       24,169  
INTANGIBLE ASSETS, net of accumulated amortization of - 2021: $16,403; 2020: $27,325   357       612  
DEFERRED INCOME TAXES   622       358  
OTHER LONG-TERM ASSETS, including reinsurance assets   81,866       31,346  
TOTAL ASSETS   428,330       453,678  
                     
          LIABILITIES          
CURRENT LIABILITIES          
  Short-term credit facilities for ATM funding   14,245       14,814  
  Accounts payable   7,113       6,287  
  Other payables   27,588       23,779  
  Operating lease liability - current   2,822       2,251  
  Income taxes payable   256       16,157  
    Total current liabilities before settlement obligations   52,024       63,288  
      Settlement obligations   466       8,015  
        Total current liabilities   52,490       71,303  
DEFERRED INCOME TAXES   10,415       1,859  
OPERATING LEASE LIABILITY - LONG TERM   1,890       3,312  
OTHER LONG-TERM LIABILITIES, including insurance policy liabilities   2,576       2,012  
TOTAL LIABILITIES   67,371       78,486  
COMMITMENTS AND CONTINGENCIES   -       -  
REDEEMABLE COMMON STOCK   84,979       84,979  
                     
          EQUITY          
NET1 EQUITY:          
COMMON STOCK          
  Authorized: 200,000,000 with $0.001 par value;          
  Issued and outstanding shares, net of treasury: 2021: $56,716,620; 2020: $57,118,925   80       80  
PREFERRED STOCK          
  Authorized shares: 50,000,000 with $0.001 par value;          
  Issued and outstanding shares, net of treasury: 2021: -; 2020: -   -       -  
ADDITIONAL PAID-IN-CAPITAL   301,959       301,489  
TREASURY SHARES, AT COST: 2021: $24,891,292; 2020: $24,891,292   (286,951 )     (286,951 )
ACCUMULATED OTHER COMPREHENSIVE LOSS   (145,721 )     (169,075 )
RETAINED EARNINGS   406,613       444,670  
TOTAL NET1 EQUITY   275,980       290,213  
NON-CONTROLLING INTEREST   -       -  
TOTAL EQUITY   275,980       290,213  
TOTAL LIABILITIES, REDEEMABLE COMMON STOCK AND SHAREHOLDERS’ EQUITY $ 428,330     $ 453,678  

(A) Derived from audited consolidated financial statements.


NET 1 UEPS TECHNOLOGIES, INC.
Consolidated Statements of Cash Flows
      Unaudited   (A)
      Three months ended   Year ended
      June 30,   June 30,
      2021
  2020
  2021
  2020
      (In thousands)   (In thousands)
                           
Cash flows from operating activities                      
  Net income (loss) $ 1,639     $ (38,880 )   $ (38,057 )   $ (78,358 )
  Depreciation and amortization   1,218       996       4,347       13,299  
  Impairment loss   -       -       -       6,336  
  Movement in allowance for doubtful accounts receivable   (803 )     383       110       743  
  Loss (Earnings) from equity-accounted investments   4,780       (1,082 )     24,878       29,542  
  Movement in allowance for doubtful loans   4,000       316       4,739       1,035  
  Inventory net realizable value adjustment   -       1,298       -       1,298  
  Change in fair value of equity securities   (23,362 )     -       (49,304 )     -  
  Fair value adjustment related to financial liabilities   (361 )     413       840       (340 )
  Interest payable   45       3       (1 )     1,758  
  Loss on disposal of equity-accounted investment - Bank Frick   -       -       472       -  
  Loss on disposal of equity-accounted investment   -       -       13       -  
  Gain on disposal of Net1 Korea   -       279       -       (12,454 )
  Gain on disposal of FIHRST   -       -       -       (9,743 )
  Loss on deconsolidation of CPS   -       7,148       -       7,148  
  Loss on disposal of equity-accounted investment - DNI   -       1,010       -       1,010  
  (Profit) Loss on disposal of property, plant and equipment   (120 )     (32 )     480       (127 )
  Stock-based compensation charge, net   (532 )     558       344       1,728  
  Dividends received from equity accounted investments   69       1,424       194       3,549  
  (Increase) Decrease in accounts receivable and finance loans receivable   (479 )     (4,879 )     3,751       8,818  
  (Increase) Decrease in inventory   (1,363 )     (1,292 )     1,279       (19,328 )
  Increase (Decrease) in accounts payable and other payables   4,058       4,521       (335 )     (139 )
  Decrease in taxes payable   (1,712 )     (340 )     (17,210 )     (1,427 )
  Increase (Decrease) in deferred taxes   4,665       225       5,089       (393 )
    Net cash used in operating activities   (8,258 )     (27,931 )     (58,371 )     (46,045 )
Cash flows from investing activities                      
Capital expenditures   (338 )     (1,445 )     (4,285 )     (5,938 )
Proceeds from disposal of property, plant and equipment   226       216       571       578  
Proceeds from disposal of equity-accounted investment - Bank Frick   -       -       18,568       -  
Proceeds from disposal of Net1 Korea, net of cash disposed   -       -       20,114       192,619  
Transaction costs paid related to disposal of Net1 Korea   -       -       -       (7,458 )
Proceeds from disposal of DNI as equity-accounted investment   -       42,477       6,010       42,477  
Transaction costs paid related to disposal of DNI as equity-accounted investment   -       (1,010 )     -       (1,010 )
Proceeds from disposal of FIHRST, net of cash disposed   -       -       -       10,895  
Deconsolidation of CPS - cash disposed   -       (328 )     -       (328 )
Investment in equity-accounted investments   -       -       -       (2,500 )
Loan to equity-accounted investment   -       (519 )     (1,238 )     (1,230 )
Repayment of loans by equity-accounted investments   -       -       134       4,268  
Net change in settlement assets   1,711       18       7,901       (9,256 )
  Net cash provided by investing activities   1,599       39,409       47,775       223,117  
Cash flows from financing activities                      
Proceeds from bank overdraft   98,324       104,490       360,083       689,763  
Repayment of bank overdraft   (97,137 )     (142,682 )     (365,440 )     (747,935 )
Proceeds from issue of shares   -       -       53       -  
Proceeds from disgorgement of shareholders' short-swing profits   -       -       124       -  
Long-term borrowings utilized   -       -       -       14,798  
Repayment of long-term borrowings   -       (3,190 )     -       (14,503 )
Guarantee fee   -       -       -       (148 )
Finance lease capital repayments   -       -       -       (69 )
Net change in settlement obligations   (1,711 )     (18 )     (7,901 )     9,256  
  Net cash used in financing activities   (524 )     (41,400 )     (13,081 )     (48,838 )
Effect of exchange rate changes on cash   4,118       1,747       14,957       (17,260 )
Net decrease in cash, cash equivalents and restricted cash   (3,065 )     (28,175 )     (8,720 )     110,974  
Cash, cash equivalents and restricted cash – beginning of period   226,830       260,660       232,485       121,511  
Cash, cash equivalents and restricted cash – end of period $ 223,765     $ 232,485     $ 223,765     $ 232,485  

(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, 2021 and 2020 and March 31, 2021

                                Change - actual Change –
constant
exchange rate
(1)
                Q4 '21   Q4 '20   Q3 '21 Q4 '21
vs
Q4 '20
Q4 '21
vs
Q3 '21
Q4 '21
vs
Q4 '20
Q4 '21
vs
Q3 '21
Key segmental data, in ’000, except margins       (as restated)(A)    
Revenue:                          
  Processing   $ 21,192     $ 16,391     $ 18,747   29 % 13 % 6 % 7 %
    All Other     21,192       15,470       18,741   37 % 13 % 12 % 7 %
    IPG     -       921       6   nm nm nm nm
  Financial services     10,830       8,751       10,192   24 % 6 % 1 % 1 %
  Technology     4,905       1,932       2,026   154 % 142 % 108 % 129 %
      Subtotal: Operating segments     36,927       27,074       30,965   36 % 19 % 12 % 13 %
      Intersegment eliminations     (2,410 )     (2,523 )     (2,137 ) (4 %) 13 % (22 %) 7 %
         Consolidated revenue   $ 34,517     $ 24,551     $ 28,828   41 % 20 % 15 % 13 %
Operating (loss) income:                          
  Processing   $ (5,785 )   $ (10,089 )   $ (10,816 ) (43 %) (47 %) (53 %) (49 %)
    All Other     (5,809 )     (5,809 )     (7,484 ) -   (22 %) (18 %) (26 %)
    IPG     24       (4,280 )     (3,332 ) nm nm nm nm
  Financial services     (2,875 )     (1,016 )     (2,111 ) 183 % 36 % 132 % 29 %
  Technology     (357 )     136       131   nm nm nm nm
      Subtotal: Operating segments     (9,017 )     (10,969 )     (12,796 ) (18 %) (30 %) (33 %) (33 %)
      Corporate/Eliminations     (4,583 )     (2,211 )     (1,496 ) 107 % 206 % 70 % 190 %
          Consolidated operating loss   $ (13,600 )   $ (13,180 )   $ (14,292 ) 3 % (5 %) (15 %) (10 %)
Operating (loss) income margin (%)                          
  Processing     (27.3 %)     (61.6 %)     (57.7 %)        
    IPG     (27.4 %)     (37.6 %)     (39.9 %)        
    All Other     -       (464.7 %)     nm        
  Financial services     (26.5 %)     (11.6 %)     (20.7 %)        
  Technology     (7.3 %)     7.0 %     6.5 %        
      Consolidated operating margin     (39.4 %)     (53.7 %)     (49.6 %)        

(A) – 2020 has been restated to correct an error with respect to the recognition of certain revenue and related cost of goods sold, IT processing, servicing and support.

(1) – This information shows what the change in these items would have been if the USD/ ZAR exchange rate that prevailed during Q4 2021 also prevailed during Q4 2020 and Q3 2021.


Twelve months ended June 30, 2021 and 2020

                            Change - actual Change – constant exchange rate(1)
                F2021   F2020   F2021
vs
F2020

F2021

vs
F2020
Key segmental data, in ’000, except margins       (as restated)(A)  
Revenue:                  
  Processing   $ 82,435     $ 91,786     (10 %) (20 %)
    All other     80,742       88,476     (9 %) (18 %)
    IPG     1,693       3,310     (49 %) (54 %)
  Financial services     38,996       46,870     (17 %) (26 %)
  Technology     17,751       18,071     (2 %) (12 %)
      Subtotal: Operating segments     139,182       156,727     (11 %) (21 %)
      Intersegment eliminations     (8,396 )     (12,428 )   (32 %) (40 %)
        Consolidated revenue     130,786       144,299     (9 %) (19 %)
Operating (loss) income:                  
  Processing   $ (34,283 )   $ (33,836 )   1 % (9 %)
    IPG     (23,556 )     (21,488 )   10 % nm
    All other     (10,727 )     (12,348 )   (13 %) nm
  Financial services     (8,429 )     (3,621 )   133 % 108 %
  Technology     2,627       2,815     (7 %) (17 %)
      Subtotal: Operating segments     (40,085 )     (34,642 )   16 % 4 %
      Corporate/Eliminations     (13,787 )     (9,606 )   44 % 28 %
          Consolidated operating loss     (53,872 )     (44,248 )   22 % 9 %
Operating (loss) income margin (%)                  
  Processing     (41.6 %)     (36.9 %)      
    All other     (29.2 %)     (24.3 %)      
    IPG     (633.6 %)     (373.1 %)      
  Financial services     (21.6 %)     (7.7 %)      
  Technology     14.8 %     15.6 %      
      Consolidated operating margin     (41.2 %)     (30.7 %)      

(A) – 2020 has been restated to correct an error with respect to the recognition of certain revenue and related cost of goods sold, IT processing, servicing and support.

(1) – This information shows what the change in these items would have been if the USD/ ZAR exchange rate that prevailed during fiscal 2021 also prevailed during fiscal 2020.


(Loss) Earnings from equity-accounted investments:

The table below presents the (loss) earnings from our equity-accounted investments:

      Q4 2021     Q4 2020   % change     F2021     F2020   % change
Finbond $ (1,742 )   $ 1,349     nm   $ (22,009 )   $ 1,840     nm
  Share of net (loss) income   (1,742 )     1,349     nm     (4,359 )     1,840     nm
  Impairment   -       -     nm     (17,650 )     -     nm
Bank Frick   -       651     nm     1,156       (17,273 )   nm
  Share of net income   -       651     nm     1,156       1,421     (19 %)
  Amortization of intangible assets, net of deferred tax   -       -     nm     -       (433 )   nm
  Impairment   -       -     nm     -       (18,261 )   nm
DNI   -       -     nm     -       (9,744 )   nm
  Share of net income   -       -     nm     -       4,676     nm
  Amortization of intangible assets, net of deferred tax   -       -     nm     -       (1,350 )   nm
  Impairment   -       -     nm     -       (13,070 )   nm
Other   (3,038 )     (918 )   231 %     (4,025 )     (4,365 )   (8 %)
  Share of net loss   (92 )     (918 )   (90 %)     (531 )     (1,865 )   (72 %)
  Impairment   (2,946 )     -     nm     (3,494 )     (2,500 )   40 %
  (Loss) Earnings from equity-accounted investments $ (4,780 )   $ 1,082     nm   $ (24,878 )   $ (29,542 )   (16 %)


Net 1 UEPS Technologies, Inc.

Attachment B

Reconciliation of GAAP operating loss to EBITDA (loss) and adjusted EBITDA (loss):

Three months ended June, 30, 2021 and 2021, and March 31, 2021; and twelve months ended June 30, 2021 and 2020

                  Year ended June 30,
              Q4 2021   Q4 2020   Q3 2021   2021   2020
Operating loss - GAAP (13,600 )   (13,180 )   (14,292 )   (53,872 )   (44,248 )
  Depreciation and amortization 1,218     996     1,132     4,347     4,647  
  Impairment loss -     -     -     -     6,336  
    Negative EBITDA (12,382 )   (12,184 )   (13,160 )   (49,525 )   (33,265 )
      Allowance for doubtful loans receivables from equity-accounted investments 4,000     316     -     4,739     1,035  
      Transaction costs 174     -     337     1,879     2,876  
        Adjusted EBITDA loss (8,208 )   (11,868 )   (12,823 )   (42,907 )   (29,354 )


Reconciliation of GAAP net income (loss) and earnings (loss) per share, basic, to fundamental net loss and loss per share, basic:

Three months ended June 30, 2021 and 2020

  Net income (loss)
(USD '000)
  E(L)PS, basic
(USD)
  Net income (loss)
(ZAR '000)
  E(L)PS, basic
(ZAR)
  2021   2020   2021   2020   2021   2020   2021   2020
GAAP 1,639     (38,880 )   0.03     (0.68 )   23,223     (671,885 )   0.41     (11.76 )
Change in fair value of equity securities, net (18,456 )   -             (261,497 )   -          
Allowance for doubtful EMI loans receivable 4,000     316             56,675     5,461          
Impairment of equity method investment 2,946     -             41,741     -          
Stock-based compensation charge (532 )   558             (7,538 )   9,643          
Transaction costs 174     -             2,465     -          
Intangible asset amortization, net 70     58             990     990          
Termination fee paid to cancel Bank Frick option -     17,517             -     302,711          
Loss on deconsolidation of CPS -     7,148             -     123,525          
Loss on sale of DNI -     1,010             -     17,454          
Interest related to SASSA implementation costs refund -     298             -     5,156          
Fundamental (10,159 )   (11,975 )   (0.18 )   (0.21 )   (143,941 )   (206,945 )   (2.54 )   (3.62 )


Twelve months ended June 30, 2021 and 2020

  Net (loss) income
(USD '000)
  (L)EPS, basic
(USD)
  Net (loss) income
(ZAR '000)
  (L)EPS, basic
(ZAR)
  2021     2020     2021     2020     2021     2020     2021     2020  
GAAP (38,057 )   (78,358 )   (0.67 )   (1.38 )   (598,111 )   (1,376,640 )   (10.54 )   (24.25 )
Change in fair value of equity securities, net (38,950 )   -             (612,149 )   -          
Impairment of equity method investments 21,144     32,084             327,140     563,672          
Allowance for doubtful EMI loans receivable 4,739     1,035             74,479     18,184          
Transaction costs 1,879     2,876             29,531     50,527          
Reversal of deferred taxes related
to impairment of equity method
investment
(1,353 )   -             (22,633 )   -          
Loss on disposal of equity-accounted
investment - Bank Frick
472     -             7,418     -          
Stock-based compensation charge 344     2,607             5,406     45,801          
Intangible asset amortization, net 253     3,805             3,961     66,835          
Loss on sale of equity method investment 13     -             204     -          
Termination fee paid to cancel Bank Frick option -     (17,517 )           -     (307,749 )        
Gain on discontinued operation -     (12,454 )           -     (218,799 )        
Gain on disposal of FIHRST -     (9,743 )           -     (171,171 )        
Loss on deconsolidation of CPS -     7,148             -     125,580          
Impairment loss -     6,336             -     111,314          
Intangible asset amortization, net
related to equity accounted
investments
-     1,783             -     31,325          
Interest related to SASSA
implementation costs refund
-     1,361             -     23,909          
Loss on sale of DNI -     1,010             -     17,744          
Fundamental (49,516 )   (58,027 )   (0.87 )   (1.02 )   (784,754 )   (1,019,468 )   (13.82 )   (17.96 )


Net 1 UEPS Technologies, Inc.

Attachment C

Reconciliation of net income (loss) used to calculate earnings (loss) per share basic and diluted and headline loss per share basic and diluted:

Three months ended June 30, 2021 and 2020

    2021   2020
         
Net income (loss) (USD’000) 1,639     (38,880 )
Adjustments:      
  Impairment of equity method investments 2,946     -  
  Loss on deconsolidation of CPS -     7,148  
  Loss on sale of DNI -     1,010  
  Profit on sale of property, plant and equipment (120 )   (32 )
  Tax effects on above 34     9  
Net income (loss) used to calculate headline loss (USD’000) 4,499     (30,745 )
Weighted average number of shares used to calculate net earnings (loss) per share basic loss and headline earnings (loss) per share basic loss (‘000) 56,678     57,119  
Weighted average number of shares used to calculate net loss per share diluted (earnings) loss and headline (earnings) loss per share diluted loss (‘000) 56,937     57,119  
Headline earnings (loss) per share:      
  Basic, in USD 0.08     (0.54 )
  Diluted, in USD 0.08     (0.54 )


Twelve months ended June 30, 2021 and 2020

    2021   2020
Net loss (USD’000) (38,057 )   (78,358 )
Adjustments:      
  Impairment of equity method investments 21,144     33,831  
  Loss on disposal of equity-accounted investment - Bank Frick 430     -  
  Gain on disposal of discontinued operation -     (12,454 )
  Gain on disposal of FIHRST -     (9,743 )
  Impairment loss -     6,336  
  Loss on deconsolidation of CPS -     7,148  
  Loss on sale of DNI -     1,010  
  Loss (Profit) on sale of property, plant and equipment 480     (127 )
  Tax effects on above (134 )   36  
Net loss used to calculate headline loss (USD’000) (16,137 )   (52,321 )
Weighted average number of shares used to calculate net loss per share basic loss and headline loss per share basic loss (‘000) 56,765     56,764  
Weighted average number of shares used to calculate net loss per share diluted loss and headline loss per share diluted loss (‘000) 56,898     56,764  
Headline loss per share:      
  Basic, in USD (0.28 )   (0.92 )
  Diluted, in USD (0.28 )   (0.92 )


Calculation of the denominator for headline diluted loss per share

      Q4 2021   Q4 2020   F2021   F2020
Basic weighted-average common shares outstanding and unvested restricted shares expected to vest under GAAP 56,678   57,119   56,765   56,764
  Effect of dilutive securities under GAAP 259   -   133   -
    Denominator for headline diluted loss per share 56,937   57,119   56,898   56,764

Weighted average number of shares used to calculate headline diluted earnings (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 earnings (loss) per share because we do not use the two-class method to calculate headline diluted (earnings) loss per share.


Primary Logo

Source: Net 1 UEPS Technologies, Inc.

Share to Facebook Share to Twitter Share