Net 1 UEPS Technologies (UEPS) Reports Q3 Loss of $0.62

Net 1 UEPS Technologies (NASDAQ: UEPS) reported Q3 EPS of ($0.62), versus $0.95 reported last year. Revenue for the quarter came in at $86.48 million, versus $162.72 million reported last year.

• Revenue of $86.5 million, GAAP EPS of $(0.96) and Fundamental EPS of $(0.62)
• Fundamental EPS of ($0.62) includes $25.2 million, or $0.44 per share of non-cash fair value loss adjustments for Cell C, net of tax, and the impairment of the Cedar Cell note;
• Operating loss of $21.7 million, Adjusted EBITDA improved sequentially to a loss of $(1.1) million;
• Early-settlement of long-term South African debt on May 3, 2019; net cash of $24 million at March 31, 2019;
• Monetization of DNI commenced with reduction of ownership from 55% to 30.4% since March 2019; DNI given a call option to acquire the remaining 30.4% at an exercise price of $59.3 million prior to December 31, 2019; and
• Active EPE accounts remained stable at 1.1 million as of March 31, 2019.

“We are pleased that our core South African operations demonstrated far more stability during the third-quarter, allowing us to focus on our extensive cost-containment exercise, a significant reduction of debt and other obligations, and the first steps towards the realization of value of some of our assets,” said Herman Kotzé, CEO. “The retrenchment of thousands of Net1 family members has been one of the most difficult processes we have ever faced and we completed the necessary actions to remain on track to achieve a monthly EBITDA-neutral position for our South African operations by the end of Q4 2019. The Board and management remain squarely focused on reviewing all options available for the Group, and will provide updates when there are tangible actions to report.”

“In Korea, our advisors are actively engaged with management to execute the near-term action items to drive higher growth and profitability, and in parallel, our Board, with financial advisors, is reviewing the strategic alternatives for this business. Cell C is focused on managing its near-term liquidity constraints, closing its transaction with a new minority investor and improving the performance of the business. Our other equity investments continued to perform in line with expectations during the quarter,” continued Kotzé. “With the deleveraging of the balance sheet that has been achieved since our last report, we remain comfortable with our liquidity position for the next 12 months.”

For earnings history and earnings-related data on Net 1 UEPS Technologies (UEPS) click here.

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