Net1 sticks with SA focus as it reports recovery from June
The technology group’s micro-lending and insurance businesses were under pressure amid Covid-19 lockdowns, but focus remains on SA
Financial services and technology group Net1 UEPS says it is eyeing continued expansion in SA in spite of a Covid-19 hit, saying loan advancements showed strong recovery in June, when ATM utilisation returned to pre-Covid-19 levels.
The group said it believed it was well-positioned to provide value-added financial services, looking to take advantage of some of the “emerging trends in electronic payment methods and related areas.”
The group provides transaction processing services, including being a leading payment processor and bill payment platform in SA. The group also leverages its banking and payment platform to provide to “distribute low-cost financial and value-added services to under served consumers and small businesses.”
Net1 reported its headline loss narrowed to $52.3m (R881m) in its year to end-June, from $282.6m previously, receiving about a $192m boost from the sale of its South Korean payment processor KSNET. This sale was announced in January.
The net impact of the lockdown on the group’s fourth quarter to end-June was an earnings before interest, taxation, depreciation and amortisation (ebitda) loss of R32m, the group said.
Net1 said it was unable to charge about R27m of withdrawal fees under the pandemic regulations and its micro-lending and insurance businesses was unable to operate during the initial lockdown period.
“SA is, and always has been, the engine room of Net1,” said CFO Alex Smith. “Following our strategic review, we intend to focus our incremental capital and management resources to scale up our South African businesses, and return Net1 to a sustainable, cash generative business,” he said.