Net 1 UEPS Technologies Inc (NASDAQ:UEPS) EBITDA Loss narrows in Q4

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Net 1 UEPS Technologies Inc (NASDAQ:UEPS) stock rose 4.83% (As on Sep 14, 10:05:29 AM UTC-4, Source: Google Finance) after the company in the fourth quarter of FY 21 has reported the Adjusted EBITDA loss of $8.2 million in Q4 2021, which represents a $4.6 million improvement from Q3 2021 after the closure of IPG. Processing revenue, excluding IPG, was $21.2 million in Q4 2021, up 12% compared with Q4 2020 and up 7% compared with Q3 2021 on a constant currency basis. Financial services revenue was $10.8 million in Q4 2021, which is up 1% on a constant currency basis compared with both Q4 2020 and Q3 2021. Financial services revenue was affected due to higher lending revenue, which was partially offset by lower account fees. The increase in operating loss is primarily due to the lower account fee revenue and the increase in insurance-related claims experienced this quarter attributed to the second wave of the pandemic. The segment’s operating loss margin for Q4 2021 and 2020 was (26.5%) and (11.6%), respectively. Technology revenue was $4.9 million in Q4 2021, up 108%, compared with Q4 2020, and up 129% compared with Q3 2021 on a constant currency basis. Technology revenue increased due to a higher volume of hardware sales from one product line compared to the prior period. At June 30, 2021, the cash and cash equivalents were $198.6 million and comprised of U.S. dollar-denominated balances of $169.8 million, ZAR-denominated balances of ZAR 0.4 billion ($26.5 million), and other currency deposits, primarily Botswana pula, of $2.3 million, all amounts translated at exchange rates applicable as of June 30, 2021. The decrease in the unrestricted cash balances from June 30, 2020, was mainly due to the payment of Federal income taxes, weak trading activities and an increase in the lending book, which was partially offset by the receipt of the outstanding proceeds related to the sale of the Korean business, receipt of proceeds related to the disposal of the interest in Bank Frick and the receipt of the outstanding loan related to the disposal of the remaining interest in DNI.

Moreover, during the fourth quarter, there has been net increase of approximately 23,000 EasyPay Everywhere (EPE) account holders during Q4 2021, and an additional 61,000 combined in July and August of 2021.

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