Net 1 UEPS Technologies has posted lower revenue for the second quarter, but is confident that organisational changes will see performance improve going forward.
During the quarter, the group recorded a net increase of 44 000 EasyPay Everywhere (EPE) account holders, the first quarterly increase in eight quarters.
Its IPG exit process at an advanced stage, which should result in reduced operating losses and cash burn going forward. And a non-cash increase of $15,1-million, before tax effect, in the fair value of investment in MobiKwik. The group also sold its entire interest in Bank Frick after quarter-end.
At 31 December 2020, Net 1 UEPS Technologies recorded unrestricted cash of $206-million and no debt.
Revenue stood at $32.3-million, a constant currency decrease of 12% from Q2 2020, and a decrease of 15% from Q1 2021; with an operating loss of $15,2-million.
GAAP EPS was $(0.08) and Fundamental EPS at $(0.24). An adjusted EBITDA loss of $12,8-million was recorded, a sequential increase from a loss of $10,8-million in Q1 2021.
“We have made strong operational progress this quarter, which should result in improved financial performance going forward,” says Alex Smith, Net1’s interim CEO and chief financial officer. “In South Africa, our consumer bank account offering, EasyPay Everywhere, added approximately 44 000 net accounts during the quarter – the first quarterly increase in eight quarters.
“In addition, we saw another sequential increase in the utilization of our ATM infrastructure.
“Internationally, we made significant progress on the exit from IPG,” Smith adds. “While once-off closure costs from IPG have impacted this quarter’s results, the operational losses and cash burn should reduce materially going forward due to the decisive actions taken this quarter.
“We are actively working to resolve our Investment Company Act status in order for us to effect a partial return of capital as soon as we are able to do so. We are fully focused on executing our strategy to grow Net1 into the leading fintech business in South Africa.”