Net 1 UEPS Technologies has reported revenue of $74,1-million for the second quarter of 2020, with an operating loss of $6,9-million.
During the period if signed an agreement to KSNet for $237-million, and disposed of FIHRST for $11,7-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,” says 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 adds.
Alex Smith, Net1’s chief financial officer, says: “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 R14.27/$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 realisations, and IPG’s inability to launch its new products due to the dependencies on Visa’s certification.
“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 adds.
On 27 January 2020, Net1 UEPS agreed to sell 100% of KSNET, a leading Republic of Korea payment processor, to PayletterHoldings for approximately $237-million. The transaction, which is not subject to a financing condition, is expected to close in March 2020.