Net 1 UEPS Technologies (UEPS) Misses Q1 EPS by 13c, Revenues Miss; Lowers FY19 EPS Guidance

November 8, 2018 4:10 PM EST

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Net 1 UEPS Technologies (NASDAQ: UEPS) reported Q1 EPS of $0.01, $0.13 worse than the analyst estimate of $0.14. Revenue for the quarter came in at $126 million versus the consensus estimate of $145.03 million.

  • Revenue of $126 million and Fundamental EPS of $0.01 (including a loss of $0.28 per share related to CPS);
  • Adjusted EBITDA of $13 million and free cash flow of $13 million, despite CPS losses;
  • Korea EBITDA margin improved sequentially to 22%, from 20% in Q4 2018;
  • Net cash increased to $50 million, from $40 million in Q4 2018;
  • Active EPE accounts declined to 1.7 million in October, primarily due to forced migration in August and September;
  • DNI contributed revenue and operating income of $17.9 million and $7.6 million, ahead of budget; and
  • Equity investments performed in-line with our expectations.

Outlook

“For fiscal year 2019, we have now factored in the lower than previously expected EPE base as of September, as well as the resulting impact on our financial inclusion businesses, together with lower volumes and higher restructuring costs at IPG during Q1 2019. We therefore expect FEPS of at least $0.65 for fiscal 2019, down from prior guidance of $1.05. Of this reduction, $0.30 relates in equal parts to lower EPE fees due to fewer accounts and a related reduction in associated financial services, while the balance of the change is due to funding costs for our ATMs and losses incurred by IPG,” said Alex Smith, CFO of Net1.

GUIDANCE:

Net 1 UEPS Technologies sees FY2019 EPS of $0.65, versus the consensus of $0.00.

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



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