Net1 Q2 EPS up 154% to $0.56
Listed alternative payment systems provider Net1 UEPS Technologies (Net1, NT1), on Friday reported a 154% rise in earnings per share to US$0.56 for the second quarter.
The group noted a 3% growth in revenue to $92.1 million.
For its South African transaction-based activities, segment revenue was $46.4 million in 2Q 2012, down 1% compared with 2Q 2011 in USD and up 17% on a constant currency basis.
In rand terms, the increase in segment revenue was primarily due to modest growth in the group’s pension and welfare business, the acquisition of Eason’s prepaid airtime and electricity business and increased transaction volumes in rural merchant acquiring and MediKredit.
Segment operating income margin was 34% compared to 40% a year ago and has declined due to the inclusion of increased low-margin prepaid airtime sales and Eason intangible asset amortisation, Net 1 said. Excluding amortisation of acquisition-related intangibles, 2Q 2012 segment operating income margin was 38%, compared to 43% during 2Q 2011.
“Our 2Q 2012 results continued the strong momentum of our businesses from the previous quarter,” said Dr. Serge Belamant, chairman and CEO of Net1.
“I am particularly pleased with SASSA’s decision to award the social grants tender on a national basis to Net1, as well as the conclusion of our BEE transaction, both of which put us in a strong strategic position to drive long-term growth.
“We are honoured and privileged to provide the highest levels of service and convenience at the lowest cost to the South African government as well as its citizens. Our focus over the next several months will be to execute on the expectations laid upon us by providing a comprehensive, seamless and superior service to this important constituency,” he said.
“The next twelve months will require substantial investment in capital equipment and establishment costs as we implement the new SASSA contract,” said Herman Kotze, CFO of Net1.
“The substantial increase in the beneficiaries, although at a lower price, should increase our monthly pension and welfare revenue by approximately 45% in rands and once we are fully phased in, at the very least maintain our operating income that we generate from our current contract.
“We currently expect to be fully phased-in by the second quarter of fiscal 2013. We anticipate capital expenditure of $45-$50 million during the next twelve months.
“The next three quarters are difficult for us to predict at this time, given the timing and magnitude of investments required in any given quarter, however we anticipate still being profitable on a fundamental earnings basis for the second half of fiscal 2012,” he said.
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