Net 1 UEPS Technologies has reported revenue of $71,2-million, GAAP EPS of -$2.63 and fundamental EPS of – $2.45 for the fourth quarter of 2019.
Fundamental EPS of -$2.45 includes $125,4-million, or $2.21 per share of non-cash fair value loss adjustments for Cell C, net of tax, and $13,7-million, or $0.24 per share for impairments of the Cedar Cellular note and goodwill.
Total revenue from continuing operations in constant currency grew 3,5% compared to Q3 2019, while adjusted EBITDA loss improved from $9,4-million in Q3 2019 to a loss of $0,7-million in Q4 2019;
South African operations achieved EBITDA breakeven in July 2019; active EPE accounts remained stable at 1,1-million.
KSNET revenue grew 11% compared to Q3 2019 in constant currency, while EBITDA margin improved 200 basis points.
“We are pleased to report that we have stabilised our business in South Africa, and we are focused on returning to growth and profitability in fiscal 2020,” says Herman Kotze, CEO of Net1 UEPS Technologies.
“Going forward, we are returning to our roots of providing innovative and affordable financial technology and services offerings to the unbanked and underbanked, as well as leveraging our deep expertise in cryptography and secure transactions to introduce new and relevant products.
“We also continue to review our portfolio of investments for those that do not fit our strategic focus or give us a path to control, and will accordingly be evaluated for monetisation.
“Building on our disposal of DNI which started in Q3 2019, the company has now received multiple indicative offers for KSNET in Korea, and we have engaged FT Partners to assist the board to determine the appropriate course of action.
“With the challenges of the last year and the required repositioning behind us, we are well positioned to unlock shareholder value and improve capital allocation going forward.”
Alex Smith, chief financial officer of Net1 UEPS Technologies, comments: “As we look to fiscal 2020, our progress should be benchmarked to our Q4 2019 results rather than year-over-year comparisons given the contract termination and business disposals over the course of fiscal 2019.
“In fiscal 2020, we expect to generate adjusted EBITDA of at least $16-million using a constant currency base of R14.27/$1, driven by growth in South Korea and South Africa, and reduced losses in our IPG business.
“We are working closely with Cell C and its stakeholders to improve its short-term liquidity challenges, conclude its recapitalisation and as a result, create a long-term sustainable business.
“Our other equity investments continued to perform in line, or ahead of expectations during the quarter.”