Net1 banks on big increase in its EasyPay accounts
DURBAN - NET1 UEPS Technologies said on Friday that its EasyPay Everywhere increased by 44 000 account holders in South Africa during the second quarter to end December, its first quarterly increase in eight quarters.
EasyPay focuses on the provision of high-volume, secure and convenient payment, prepayment and value-added services to the South African market.
EasyPay’s infrastructure connects into all major South African banks and switches both debit and credit card EFT transactions for some of South Africa’s leading retailers and petroleum companies.
Interim chief executive Alex Smith said on Friday that Net1 had seen another sequential increase in the use of their ATM infrastructure.
“We have made strong operational progress this quarter, which should result in improved financial performance going forward.
“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,” Smith said. However, despite the increase in account holders, the group widened its adjusted loss to $12.79 million (R189.52m) for the quarter, from $7.48m in the same quarter a year before.
Its revenue declined by 12 percent to $32.3m, at constant currency basis, while operating loss increased to $15.21m compared to an operating loss of $10.42 reported a year earlier.
The group said it had made significant progress on the exit from International Payment Group (IPG) internationally.
The IPG exit process was at an advanced stage, and is expected to result in reduced operating losses and cash burn in the future.
The group also announced the sale of its remaining interest in Bank Frick & Co back to The Kuno Frick Family Foundation for $30m.
“The sale of our interest in Bank Frick is a milestone in the execution of the corporate strategy that we announced in September 2020.
“The sale of this interest and the previously announced closure of IPG will significantly reduce the cash burn and operating losses from Net1’s noncore operations,” Smith said.
Net1 said it believed the sale would release capital and management bandwidth to increase their focus on the significant market opportunity in Net1’s areas of core competency in South Africa.
In the quarter results, Net1 was also impacted by the Covid-19 outbreak in its operations, but its South African operations were not impacted as severely during the three and six months to end December compared to the last four months of the year to end June 2020.
The group said while all of its businesses continued to operate during level 3, it had increased preventive measures and it is unclear to what extent business activity levels would be affected.
“We have already seen an increase in claims in our life insurance business, which we believe is linked to the second wave and there is a risk of increased credit losses in our micro lending business as a result of increased mortality rates,” Net1 said.
Net 1’s share price on Friday closed at R73.74, down 1.69 percent.