Johannesburg – Net1 UEPS Technologies says its reputation
has been tarnished by “frivolous public attacks”.
This statement is contained in its results for the three
months to end March, published on Friday.
In this statement to shareholders, the company notes its
earnings for the third quarter were affected by the issue of 15 million more
shares, which was partially offset by it buying back 5.5 million shares.
It also benefited from the weaker dollar, and a growth in
its lending and insurance business.
Revenue was 10 percent higher in dollar terms at $148
million, while earnings per share came in flat at 0.43USc.
In the statement, CEO Serge Belamant notes the “last few
months have been challenging, aggravated by the tarnishing of our reputation
and questioning of our business practices due to frivolous and unsubstantiated
public attacks”.
Belamant was both CEO and chairman until the company’s
board split those roles following an improvement to its governance structure.
That followed it coming under attack after the South
African Social Security agency wanted to extend a R10 billion deal with it to
provide welfare payments to 17 million South African beneficiaries.
Eventually, the Constitutional Court ruled that the deal
could be extended for a year, but under close supervision, and a new tender had
to be implemented thereafter. Net1’s lending practices were also queried after
allegations were made that a subsidiary was lending money to social grant
recipients, and then deducting the amount owed before welfare payments were
made.
Read also: Belamant quits as Net1 chairman in role split
Belamant says, “although we devoted a substantial amount
of time to manage these issues, we believe that we have made sufficient
progress towards the finalisation of our South African and international expansion
strategy”.
He adds the distribution of grants in April and May has
gone smoothly and without any delay or interruption.
“We continue to fulfil our obligations in accordance with
the Constitutional Court's order. We remain willing to support a smooth
transition to SASSA or whomever they determine to be the most suitable service
provider when our current contract expires. In the interim, we continue to
provide seamless and timely access to grants for beneficiaries and our
technology continues to save the South African government an estimated R2 billion
per annum through the identification and removal of fraudulent
beneficiaries," he argues.
Belamant says the company will soon start implementing
its plan to accelerate growth, diversification and geographic footprint.
“In South Africa we will partner, invest in or acquire
the right institutions to expand our addressable market and fuel innovation,
which in turn will lead to the creation of new products and business models.”
Net1, which is buying a stake in Cell C and Blue Label,
expects to complete these deals next quarter.
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