GlobeNewswire Inc | Feb 4, 2021 04:10PM EST

February 04, 2021

JOHANNESBURG, South Africa, Feb. 04, 2021 (GLOBE NEWSWIRE) -- Net 1 UEPS Technologies, Inc. (Nasdaq: UEPS; JSE: NT1) today released results for the second fiscal quarter ended December 31, 2020.

Q2 2021 Highlights and Recent Developments

-- Net increase of 44,000 EasyPay Everywhere (EPE) account holders, the first quarterly increase in eight quarters; -- IPG exit process at an advanced stage, which should result in reduced operating losses and cash burn going forward; -- Non-cash increase of $15.1 million, before tax effect, in the fair value of investment in MobiKwik; -- Sale of entire interest in Bank Frick after quarter-end; -- At December 31, 2020, unrestricted cash of $206 million and no debt; -- Revenue of $32.3 million, a constant currency decrease of 12% from Q2 2020, and a decrease of 15% from Q1 2021; -- Operating loss of $(15.2) million; -- GAAP EPS of $(0.08) and Fundamental EPS of $(0.24); and -- Adjusted EBITDA loss of $(12.8) million, a sequential increase from a loss of $(10.8) million in Q1 2021.

We have made strong operational progress this quarter, which should result in improved financial performance going forward. In South Africa, our consumer bank account offering, EasyPay Everywhere, added approximately 44,000 net accounts during the quarter - the first quarterly increase in eight quarters, said Alex Smith, Net1s interim CEO and CFO. In addition, we saw another sequential increase in the utilization of our ATM infrastructure. Internationally, we made significant progress on the exit from IPG. While once-off closure costs from IPG have impacted this quarters results, the operational losses and cash burn should reduce materially going forward due to the decisive actions taken this quarter. We are actively working to resolve our Investment Company Act status in order for us to effect a partial return of capital as soon as we are able to do so. We are fully focused on executing our strategy to grow Net1 into the leading fintech business in South Africa.

Summary Financial Metrics

Q2 2021 Q2 2020 Q1 2021 Q2 ?21 Q2 ?21 Q2 ?21 Q2 ?21 vs vs vs vs (as (as Q2 Q1 Q2 Q1 restated) restated) ?20 ?21 ?20 ?21 ^(1) ^(1) (Allfigures inUSD ?000s USD ?000?s except pershare data) (except per share data) % change in % change in USD ZARRevenue 32,305 38,918 35,136 (17 %) (8 %) (12 %) (15 %) GAAPoperating (15,205 ) (10,420 ) (10,775 ) 46 % 41 % 55 % 30 %loss AdjustedEBITDA (loss) (12,792 ) (7,476 ) (9,822 ) 71 % 30 % 81 % 20 %(2) GAAP (loss)earnings per (0.08 ) - (0.51 ) nm (84 %) nm (86 %)share ($)Continuing (0.08 ) (0.05 ) (0.51 ) 60 % (84 %) 69 % (86 %)Discontinued - 0.05 - nm nm nm nm Fundamentalloss per (0.24 ) (0.10 ) (0.23 ) 140 % 4 % 154 % (4 %)share ($)(2) Fully-dilutedshares 56,641 56,568 57,119 0 % (1 %) nm nm outstanding(?000?s) Averageperiod USD/ 15.47 14.60 16.77 6 % -8 % nm nm ZAR exchangerate



F2021 F2020 F2021 F2021 vs vs (as restated)^ F2020 F2020 (1) (All figures in USD ?000s except per USD ?000?s % %share data) (except per share data) change change in USD in ZARRevenue 67,441 85,134 (21 %) (9 %) GAAP operating loss (25,980 ) (16,856 ) 54 % 76 % Adjusted EBITDA (loss)(2) (22,614 ) (11,782 ) 92 % 119 % GAAP (loss) earnings per share ($) (0.59 ) (0.08 ) 638 % 743 % Continuing (0.59 ) (0.18 ) 228 % 275 % Discontinued - 0.10 nm nm Fundamental loss per share ($)(2) (0.47 ) (0.12 ) 292 % 348 % Fully-diluted shares outstanding 56,880 56,568 1 % nm (?000?s) Average period USD/ ZAR exchange 16.47 14.40 14 % nm rate

(1) 2019 has been restated to correct an error with respect to the recognition of certain revenue and related cost of goods sold, IT processing, servicing and support. The financial information for the three and six months ended December 31, 2019, has been restated with the effect of decreasing revenue by $1.6 million and $3.4 million, respectively. Refer to Note 1 to our unaudited condensed consolidated financial statements.

(2) Adjusted EBITDA (loss), fundamental loss and fundamental loss per share are non-GAAP measures and are described below under Use of Non-GAAP MeasuresEBITDA and Adjusted EBITDA, and Fundamental net (loss) income and fundamental (loss) earnings per share. See Attachment B for a reconciliation of GAAP operating loss to EBITDA (loss) and Adjusted EBITDA (loss), and GAAP net loss to fundamental net (loss) income and (loss) earnings per share.

Business update related to COVID-19 pandemic

The COVID-19 pandemic did not impact our South African operations as severely during the three and six months ended December 31, 2020, compared to the last four months of the year ended June 30, 2020. However, on December 28, 2020, the country moved back to Level 3 restrictions which remain in place at the date of this report. South Africa operates with a five-level COVID-19 alert system, with Level 1 being the least restrictive and Level 5 being the most restrictive. The country went into lockdown (Level 5) towards the end of March 2020 and gradually eased restrictions for the remainder of the 2020 calendar year (to Level 4 from May 1, to Level 3 from June 1, to Level 2 from August 18 and to Level 1 from September 21). The increase at the end of December 2020 back to Level 3 was in response to a second wave of infections, which has been more severe than the first wave. While all our businesses continue to operate, we have increased preventive measures and it is unclear to what extent business activity levels will be affected. We have already seen an increase in claims in our life insurance business, which we believe is linked to the second wave and there is a risk of increased credit losses in our micro lending business as a result of increased mortality rates. Over the course of the pandemic to date, it is estimated that 2.2 million jobs have been lost in South Africa.

Factors impacting comparability of our Q2 2021 and Q2 2020 results

-- Lower revenue: Our revenues decreased 12% in ZAR primarily due to fewer prepaid airtime sales and lower account fee revenue; -- Ongoing operating losses: Operating costs are largely in line with the prior period in ZAR due to the largely fixed cost nature of the costs base. As a result, we continue to experience operating losses as a result of depressed revenues; and -- Adverse foreign exchange movements: The U.S. dollar was 6% stronger against the ZAR during the second quarter of fiscal 2021, which adversely impacted our reported results.

Results of Operations by Segment and Liquidity

Processing

Segment revenue, excluding IPG, was $19.5 million in Q2 2021, down 16%, compared with Q2 2020 and Q1 2021 on a constant currency basis. Excluding IPG, segment revenue decreased primarily due to fewer prepaid airtime sales and a modest reduction in volume-driven transaction fees. Excluding IPG, Processing operating loss has been impacted by lower revenue and by an increase in transaction-based costs. IPG incurred an operating loss but is in the process of being closed down. Our operating loss margin for Q2 2021 and 2020 was (51.9%) and (23.4%), respectively. Excluding IPG, our operating loss margin for the Processing segment was (29.4%) and (11.9%) during Q2 2021 and 2020, respectively.

Financial services

Segment revenue was $9.7 million in Q2 2021, down 16% on a constant currency basis compared with Q2 2020 and up from $8.3 million compared to Q1 2020. Segment revenue decreased due to lower account fee revenue whilst lending and insurance revenues increased modestly, in ZAR, compared to the prior period. The reduction in operating loss is primarily due to an improvement of operating margin on certain products offered. Our operating loss margin for Q2 fiscal 2021 and 2020 was (11.0%) and (10.2%), respectively.

Technology

Segment revenue was $4.6 million in Q2 2021, flat on a constant currency basis compared with Q2 2020 but lower than the $6.2 million in Q1 2021 due to lower hardware sales. Operating income for Q2 2021 improved compared with fiscal 2020 due to improved margins on various product lines within the segment. Our operating income margin for the Technology segment was 23.4% and 12.0% during the second quarter of fiscal 2021 and 2020, respectively.

Corporate/eliminations

Our corporate expenses increased primarily due to an allowance on doubtful loans receivable from equity-accounted investments created during the second quarter of fiscal 2021, and higher legal and consulting fees, which were partially offset by lower audit fees.

Cash flow and liquidity

At December 31, 2020, our cash and cash equivalents were $206.3 million and comprised U.S. dollar-denominated balances of $156.8 million, ZAR-denominated balances of ZAR 0.7 billion ($45.5 million), and other currency deposits, primarily Botswana pula, of $3.9 million, all amounts translated at exchange rates applicable as of December 31, 2020. The decrease in our unrestricted cash balances from June 30, 2020, was primarily due to the payment of Federal income taxes, weak trading activities and an increase in our lending book, which was partially offset by the receipt of the outstanding proceeds related to the sale of our Korean business and the receipt of the outstanding loan related to the disposal of our remaining interest in DNI.

Excluding the impact of income taxes, cash used in operating activities during the second quarter of fiscal 2021 was impacted by the cash losses incurred by the majority of our continuing operations and an unwind in our lending book. Net cash used in operating activities during the second quarter of fiscal 2020 includes the contribution from our Korean operations. Capital expenditures for Q2 2021 and 2020 were $3.0 million and $0.8 million, respectively.

Conference Call

We will host a conference call to review these results on February 5, 2021, at 8:00 a.m. Eastern Time. To participate in the call, dial 1-508-924-4326 (US and Canada), 0333-300-1418 (U.K. only) or 010-201-6800 (South Africa only) ten minutes prior to the start of the call. Callers should request Net1 call upon dial-in. The call will also be webcast on the Net1 homepage, www.net1.com. Please click on the webcast link at least ten minutes prior to the call. A webcast of the call will be available for replay on the Net1 website.

Participants are now able to pre-register for the February 5, 2021, conference call by navigating to https://www.diamondpass.net/5478772. Participants utilizing this pre-registration service will receive their dial-in number upon registration.

Use of Non-GAAP Measures

U.S. securities laws require that when we publish any non-GAAP measures, we disclose the reason for using these non-GAAP measures and provide reconciliations to the most directly comparable GAAP measures. The presentation of EBITDA, adjusted EBITDA, fundamental net (loss) income and fundamental (loss) earnings per share and headline (loss) earnings per share are non-GAAP measures.

EBITDA and adjusted EBITDA

Earnings before interest, tax, depreciation and amortization (EBITDA) is GAAP operating (loss) income adjusted for depreciation and amortization. Adjusted EBITDA is EBITDA adjusted for costs related to acquisitions and transactions consummated or ultimately not pursued.

Fundamental net (loss) income and fundamental (loss) earnings per share

Fundamental net (loss) income and (loss) earnings per share is GAAP net (loss) income and (loss) earnings per share adjusted for the amortization of acquisition-related intangible assets (net of deferred taxes), stock-based compensation charges, and unusual non-recurring items, including costs related to acquisitions and transactions consummated or ultimately not pursued.

Fundamental net (loss) income and (loss) earnings per share for fiscal 2021 also includes adjustments related to changes in the fair value of equity securities, impairment losses related to our equity-accounted investment and the deferred tax liability reversal related to the impairment of the equity-accounted investment, and fiscal 2020 also includes the gain on disposal of FIHRST, amortization of intangible assets (net of deferred taxes) related to equity-accounted investments.

Management believes that the EBITDA, adjusted EBITDA, fundamental net (loss) income and (loss) earnings per share metrics enhance its own evaluation, as well as an investors understanding, of our financial performance. Attachment B presents the reconciliation between GAAP operating income and EBITDA and adjusted EBITDA; and GAAP net (loss) income and (loss) earnings per share and fundamental net (loss) income and (loss) earnings per share.

Headline (loss) earnings per share (H(L)EPS)

The inclusion of H(L)EPS in this press release is a requirement of our listing on the JSE. H(L)EPS basic and diluted is calculated using net (loss) income which has been determined based on GAAP. Accordingly, this may differ to the headline (loss) earnings per share calculation of other companies listed on the JSE as these companies may report their financial results under a different financial reporting framework, including but not limited to, International Financial Reporting Standards.

H(L)EPS basic and diluted is calculated as GAAP net (loss) income adjusted for the impairment losses related to our equity-accounted investments, gain on disposal of FIHRST, and (profit) loss on sale of property, plant and equipment. Attachment C presents the reconciliation between our net (loss) income used to calculate (loss) earnings per share basic and diluted and HE(L)PS basic and diluted and the calculation of the denominator for headline diluted (loss) earnings per share.

About Net1

Net1 is a South African-focused financial technology company with a presence in Africa, Asia and Europe. Net1 utilizes its proprietary banking and payment technology to distribute low-cost financial and value-added services to underserved consumers and small businesses. The Company also provides transaction processing services, including being a payment processor and bill payment platform in South Africa. Net1 leverages its strategic investments in banks, telecom and mobile payment technology companies to further expand its product offerings or to enter new markets.

Net1 has a primary listing on NASDAQ (NasdaqGS: UEPS) and a secondary listing on the Johannesburg Stock Exchange (JSE: NT1). Visit www.net1.com for additional information about Net1.

Forward-Looking Statements

This announcement contains forward-looking statements that involve known and unknown risks and uncertainties. A discussion of various factors that may cause our actual results, levels of activity, performance or achievements to differ materially from those expressed in such forward-looking statements are included in our filings with the Securities and Exchange Commission. We undertake no obligation to revise any of these statements to reflect future events.

Investor Relations Contact:Dara Dierks Managing Director ICR Email: net1IR@icrinc.com

Media Relations Contact:Bridget von HoldtBusiness Director BCWPhone: +27-82-610-0650Email: Bridget.vonholdt@bcw-global.com

NET 1 UEPS TECHNOLOGIES, INC.Unaudited Condensed Consolidated Statements of Operations Unaudited Unaudited Three months ended Six months ended December 31, December 31, 2020 2019 2020 2019 (as restated) (as restated) ^(A) ^(A) (In thousands) (In thousands) REVENUE $ 32,305 $ 38,918 $ 67,441 $ 85,134 EXPENSE Cost of goods sold, IT processing, 24,339 26,746 50,799 57,452 servicing and support Selling, general and 22,097 21,418 40,625 42,040 administration Depreciation and 1,074 1,174 1,997 2,498 amortization OPERATING LOSS (15,205 ) (10,420 ) (25,980 ) (16,856 ) CHANGE IN FAIR VALUE 15,128 - 15,128 - OF EQUITY SECURITIES GAIN ON DISPOSAL OF - 9,743 - 9,743 FIHRST LOSS ON DISPOSAL OFEQUITY-ACCOUNTED 13 - 13 - INVESTMENT INTEREST INCOME 717 1,082 1,328 1,445 INTEREST EXPENSE 677 3,129 1,424 4,476 INCOME (LOSS) BEFORE (50 ) (2,724 ) (10,961 ) (10,144 )INCOME TAX EXPENSE INCOME TAX EXPENSE 3,468 707 2,378 1,677 NET LOSS BEFORE(LOSS) EARNINGS FROM (3,518 ) (3,431 ) (13,339 ) (11,821 )EQUITY-ACCOUNTEDINVESTMENTS (LOSS) EARNINGS FROMEQUITY-ACCOUNTED (1,016 ) 506 (20,153 ) 1,569 INVESTMENTS NET LOSS FROMCONTINUING (4,534 ) (2,925 ) (33,492 ) (10,252 )OPERATIONSNET INCOME FROMDISCONTINUED - 2,720 - 5,655 OPERATIONS NET LOSS (4,534 ) (205 ) (33,492 ) (4,597 ) NET (LOSS) INCOME (4,534 ) (205 ) (33,492 ) (4,597 )ATTRIBUTABLE TO NET1 Continuing (4,534 ) (2,925 ) (33,492 ) (10,252 ) Discontinued $ - $ 2,720 $ - $ 5,655 Net (loss) earningsper share, in United States dollars:Basic (loss)earnings $ (0.08 ) $ - $ (0.59 ) $ (0.08 )attributable to Net1shareholders Continuing $ (0.08 ) $ (0.05 ) $ (0.59 ) $ (0.18 ) Discontinued $ - $ 0.05 $ - $ 0.10 Diluted (loss)earnings $ (0.08 ) $ - $ (0.59 ) $ (0.08 )attributable to Net1shareholders Continuing $ (0.08 ) $ (0.05 ) $ (0.59 ) $ (0.18 ) Discontinued $ - $ 0.05 $ - $ 0.10

(A) 2019 has been restated to correct an error with respect to the recognition of certain revenue and related cost of goods sold, IT processing, servicing and support. The financial information for the three and six months ended December 31, 2019, has been restated with the effect of decreasing revenue by $1.6 million and $3.4 million, respectively.

NET 1 UEPS TECHNOLOGIES, INC.Unaudited Consolidated Balance Sheets Unaudited (A) December 31, June 30, 2020 2020 (In thousands, except share data) ASSETS CURRENT ASSETS Cash and cash equivalents $ 206,251 $ 217,671 Restricted cash 60,803 14,814 Accounts receivable, net of allowance of - 24,447 43,068 December: $359; June: $253 and other receivables Finance loans receivable, net of allowance of - 21,620 15,879 December: $2,397; June: $7,658 Inventory 20,939 19,860 Total current assets before settlement assets 334,060 311,292 Settlement assets 2,814 8,014 Total current assets 336,874 319,306 PROPERTY, PLANT AND EQUIPMENT, net of accumulated 8,687 6,656 depreciation of - December: $35,954; June: $29,524OPERATING LEASE RIGHT-OF-USE 5,112 5,395 EQUITY-ACCOUNTED INVESTMENTS 53,126 65,836 GOODWILL 28,455 24,169 INTANGIBLE ASSETS, net of accumulated amortization 536 612 of - December: $29,922; June: $27,325DEFERRED INCOME TAXES 281 358 OTHER LONG-TERM ASSETS, including reinsurance 43,907 31,346 assetsTOTAL ASSETS 476,978 453,678 LIABILITIES CURRENT LIABILITIES Short-term credit facilities for ATM funding 60,803 14,814 Accounts payable 6,109 6,287 Other payables 25,066 23,779 Operating lease liability - current 2,585 2,251 Income taxes payable 984 16,157 Total current liabilities before settlement 95,547 63,288 obligations Settlement obligations 2,814 8,015 Total current liabilities 98,361 71,303 DEFERRED INCOME TAXES 3,262 1,859 OPERATING LEASE LIABILITY - LONG TERM 2,715 3,312 OTHER LONG-TERM LIABILITIES, including insurance 2,400 2,012 policy liabilitiesTOTAL LIABILITIES 106,738 78,486 COMMITMENTS AND CONTINGENCIES - - REDEEMABLE COMMON STOCK 84,979 84,979 EQUITY NET1 EQUITY: COMMON STOCK Authorized: 200,000,000 with $0.001 par value; Issued and outstanding shares, net of treasury: 80 80 December: $56,614,559; June: $57,118,925 PREFERRED STOCK Authorized shares: 50,000,000 with $0.001 par value; Issued and outstanding shares, net of treasury: - - December: -; June: -ADDITIONAL PAID-IN-CAPITAL 302,196 301,489 TREASURY SHARES, AT COST: December: $24,891,292; (286,951 ) (286,951 )June: $24,891,292ACCUMULATED OTHER COMPREHENSIVE LOSS (141,242 ) (169,075 )RETAINED EARNINGS 411,178 444,670 TOTAL NET1 EQUITY 285,261 290,213 NON-CONTROLLING INTEREST - - TOTAL EQUITY 285,261 290,213 TOTAL LIABILITIES, REDEEMABLE COMMON STOCK AND $ 476,978 $ 453,678 SHAREHOLDERS? EQUITY

(A) Derived from audited consolidated financial statements.

NET 1 UEPS TECHNOLOGIES, INC.Unaudited Condensed Consolidated Statements of Cash Flows Unaudited Unaudited Three months ended Six months ended December 31, December 31, 2020 2019 2020 2019 (In thousands) (In thousands) Cash flows from operating activities Net loss $ (4,534 ) $ (205 ) $ (33,492 ) $ (4,597 ) Depreciation and 1,074 4,381 1,997 9,146 amortization Movement in allowance for 100 (429 ) 614 83 doubtful accounts receivable Loss (Earnings) from equity-accounted 1,016 (506 ) 20,153 (1,569 ) investments Movement in allowance for 661 620 739 620 doubtful loans Change in fair value (15,128 ) - (15,128 ) - of equity securities Fair value adjustment related 790 147 1,676 234 to financial liabilities Interest payable 42 526 (21 ) 1,158 Gain on disposal of - (9,743 ) - (9,743 ) FIHRST Loss on disposal of equity-accounted 13 - 13 - investment Loss (Profit) on disposal of 752 (49 ) 742 (203 ) property, plant and equipment Stock-based 232 436 631 823 compensation charge Dividends received from equity 68 380 125 1,448 accounted investments Decrease in accounts receivable and 6,559 8,767 (1,556 ) 3,101 finance loans receivable Increase in (145 ) (682 ) 2,214 (12,995 ) inventory (Decrease) Increase in accounts payable (3,084 ) 3,132 (3,499 ) (264 ) and other payables (Decrease) Increase (421 ) (2,244 ) (15,338 ) (956 ) in taxes payable Increase (Decrease) 26 (117 ) (1,729 ) (205 ) in deferred taxes Net cash (used in) provided by (11,979 ) 4,414 (41,859 ) (13,919 ) operating activities Cash flows from investing activitiesCapital expenditures (3,023 ) (827 ) (3,298 ) (3,451 )Proceeds from disposalof property, plant and 75 90 91 303 equipmentProceeds from disposalof Net1 Korea, net of - - 20,114 - cash disposedProceeds from disposalof DNI as 5,815 - 6,144 - equity-accountedinvestmentProceeds from disposalof subsidiaries, net - 10,895 - 10,895 of cash disposedInvestment inequity-accounted - - - (1,250 )investmentsLoan toequity-accounted (1,160 ) (612 ) (1,238 ) (612 )investmentRepayment of loans byequity-accounted - - - 4,268 investmentsNet change in 1,377 3,371 5,445 (10,138 )settlement assets Net cash provided by 3,084 12,917 27,258 15 investing activities Cash flows from financing activitiesProceeds from bank 137,333 207,876 206,479 391,550 overdraftRepayment of bank (88,258 ) (193,725 ) (165,108 ) (378,554 )overdraftProceeds from issue of 18 - 18 - sharesProceeds fromdisgorgement of 26 - 124 - shareholders'short-swing profitsLong-term borrowings - - - 14,798 utilizedRepayment of long-term - (11,313 ) - (11,313 )borrowingsGuarantee fee - - - (148 )Finance lease capital - (26 ) - (52 )repaymentsNet change in (1,377 ) (3,371 ) (5,445 ) 10,138 settlement obligations Net cash provided by (used in) financing 47,742 (559 ) 36,068 26,419 activities Effect of exchange 12,296 7,508 13,102 1,053 rate changes on cashNet increase in cash,cash equivalents and 51,143 24,280 34,569 13,568 restricted cashCash, cash equivalentsand restricted cash ? 215,911 110,799 232,485 121,511 beginning of periodCash, cash equivalentsand restricted cash ? $ 267,054 $ 135,079 $ 267,054 $ 135,079 end of period

Net 1 UEPS Technologies, Inc.

Attachment A

Operating segment revenue, operating (loss) income and operating (loss) margin:

Three months ended December 31, 2020 and 2019 and September 30, 2020

Change ? Change - constant actual exchange rate ^(1) Q2 '21 Q2 '20 Q1 '21 Q2 '21 Q2 '21 Q2 '21 Q2 '21 vs vs vs vsKey segmental data, in (as (as?000, except margins restated)^ restated)^ Q2 '20 Q1 '21 Q2 '20 Q1 '21 (A) (A)Revenue: Processing $ 19,990 $ 25,022 $ 22,506 (20 %) (11 %) (15 %) (18 %) IPG 478 432 1,209 11 % (60 %) 17 % (64 %) All Other 19,512 24,590 21,297 (21 %) (8 %) (16 %) (16 %) Financial services 9,709 12,268 8,265 (21 %) 17 % (16 %) 8 % Technology 4,609 4,890 6,211 (6 %) (26 %) (0 %) (32 %) Subtotal: Operating 34,308 42,180 36,982 (19 %) (7 %) (14 %) (14 %) segments Intersegment (2,003 ) (3,262 ) (1,846 ) (39 %) 9 % (35 %) 0 % eliminations Consolidated $ 32,305 $ 38,918 $ 35,136 (17 %) (8 %) (12 %) (15 %) revenue Operating (loss) income: Processing $ (10,381 ) $ (5,848 ) $ (7,301 ) 78 % 42 % 88 % 31 % IPG (4,647 ) (2,920 ) (2,772 ) 59 % 68 % 69 % 55 % All Other (5,734 ) (2,928 ) (4,529 ) 96 % 27 % 107 % 17 % Financial services (1,071 ) (1,249 ) (2,372 ) (14 %) (55 %) (9 %) (58 %) Technology 1,078 589 1,775 83 % (39 %) 94 % (44 %) Subtotal: Operating (10,374 ) (6,508 ) (7,898 ) 59 % 31 % 69 % 21 % segments Corporate/ (4,831 ) (3,912 ) (2,877 ) 23 % 68 % 31 % 55 % Eliminations Consolidated operating $ (15,205 ) $ (10,420 ) $ (10,775 ) 46 % 41 % 55 % 30 % (loss) income Operating (loss) income margin (%) Processing (51.9 %) (23.4 %) (32.4 %) IPG (972.2 %) (675.9 %) (229.3 %) All Other (29.4 %) (11.9 %) (21.3 %) Financial services (11.0 %) (10.2 %) (28.7 %) Technology 23.4 % 12.0 % 28.6 % Consolidated (47.1 %) (26.8 %) (30.7 %) operating margin

(A) 2019 has been restated to correct an error with respect to the recognition of certain revenue and related cost of goods sold, IT processing, servicing and support.

(1) This information shows what the change in these items would have been if the USD/ ZAR exchange rate that prevailed during Q2 2021 also prevailed during Q2 2020 and Q1 2021.

Six months ended December 31, 2020 and 2019

Change ? Change - constant actual exchange rate^(1) F2021 F2020 F2021 F2021 vs vsKey segmental data, in (as?000, except margins restated)^ F2020 F2020 (A)Revenue: Processing $ 42,496 $ 53,317 (20 %) (9 %) IPG 1,687 1,225 38 % 57 % All other 40,809 52,092 (22 %) (10 %) Financial services 17,974 26,436 (32 %) (22 %) Technology 10,820 12,099 (11 %) 2 % Subtotal: Operating 71,290 91,852 (22 %) (11 %) segments Intersegment (3,849 ) (6,718 ) (43 %) (34 %) eliminations Consolidated 67,441 85,134 (21 %) (9 %) revenue Operating (loss) income: Processing $ (17,682 ) $ (11,353 ) 56 % 78 % IPG (7,419 ) (4,893 ) 52 % nm All other (10,263 ) (6,460 ) 59 % nm Financial services (3,443 ) (904 ) 281 % 335 % Technology 2,853 1,734 65 % 88 % Subtotal: Operating (18,272 ) (10,523 ) 74 % 99 % segments Corporate/ (7,708 ) (6,333 ) 22 % 39 % Eliminations Consolidated operating (loss) (25,980 ) (16,856 ) 54 % 76 % income Operating (loss) income margin (%) Processing (41.6 %) (21.3 %) IPG (439.8 %) (399.4 %) All other (25.1 %) (12.4 %) Financial services (19.2 %) (3.4 %) Technology 26.4 % 14.3 % Consolidated (38.5 %) (19.8 %) operating margin

(A) 2019 has been restated to correct an error with respect to the recognition of certain revenue and related cost of goods sold, IT processing, servicing and support.

(1) This information shows what the change in these items would have been if the USD/ ZAR exchange rate that prevailed during fiscal 2021 also prevailed during fiscal 2020.

(Loss) Earnings from equity-accounted investments:

The table below presents the relative (loss) earnings from our equity-accounted investments:

Q2 2021 Q2 2020 % F2021 F2020 % change changeBank Frick 498 494 1 % 979 469 109 % Share of net 498 636 (22 %) 979 755 30 % income Amortization of intangible - (142 ) nm - (286 ) nm assets, net of deferred taxDNI $ - $ 380 nm $ - $ 1,108 nm Share of net - 1,650 nm - 3,113 nm income Amortization of intangible - (465 ) nm - (931 ) nm assets, net of deferred tax Impairment - (805 ) nm - (1,074 ) nm Finbond (806 ) - nm (20,267 ) 491 nm Share of net - - nm (2,617 ) 491 nm (loss) income Impairment (806 ) - nm (17,650 ) - nm Other (708 ) (368 ) 92 % (865 ) (499 ) 73 % Share of net (160 ) (368 ) (57 %) (317 ) (499 ) (36 %) loss Impairment (548 ) - nm (548 ) - nm (Loss) earnings from $ (1,016 ) $ 506 nm $ (20,153 ) $ 1,569 nm equity-accounted investments

Net 1 UEPS Technologies, Inc.

Attachment B

Reconciliation of GAAP operating loss to EBITDA loss and adjusted EBITDA loss:

Three and six months ended December 31, 2020 and 2019

Three months ended Six months ended December 31, December 31, 2020 2019 2020 2019 Operating loss - GAAP (15,205 ) (10,420 ) (25,980 ) (16,856 ) Depreciation and 1,074 1,174 1,997 2,498 amortization Negative EBITDA (14,131 ) (9,246 ) (23,983 ) (14,358 ) Transaction costs 1,339 1,770 1,369 2,576 Adjusted EBITDA (12,792 ) (7,476 ) (22,614 ) (11,782 ) (loss)

Reconciliation of GAAP net loss and loss per share, basic, to fundamental net loss and loss per share, basic:

Three months ended December 31, 2020 and 2019

Net (loss) income (L)PS, basic Net (loss) income (L)PS, basic (USD '000) (USD) (ZAR '000) (ZAR) 2020 2019 2020 2019 2020 2019 2020 2019 GAAP (4,534 ) (205 ) (0.08 ) - (70,119 ) (2,993 ) (1.24 ) (0.05 ) Change infair value ofequity (11,951 ) - (184,828 ) - securities,netImpairment ofequity method 1,354 - 19,850 - investmentStock-basedcompensation 232 436 3,588 6,367 chargeTransaction 1,339 1,770 20,708 25,846 costsIntangibleasset 64 1,437 990 20,972 amortization,netLoss ondisposal of 13 - 201 - DNIGain ondisposal of - (9,743 ) - (142,269 ) FIHRSTIntangibleassetamortization,net related - 607 - 8,864 to equityaccountedinvestmentsFundamental (13,483 ) (5,698 ) (0.24 ) (0.10 ) (209,610 ) (83,213 ) (3.70 ) (1.47 )

Six months ended December 31, 2020 and 2019

Net (Loss) Income (L) EPS, basic Net (Loss) Income (L)EPS, basic (USD '000) (USD) (ZAR '000) (ZAR) 2020 2019 2020 2019 2020 2019 2020 2019 GAAP (33,492 ) (4,597 ) (0.59 ) (0.08 ) (551,530 ) (66,206 ) (9.70 ) (1.17 ) Impairment ofequity method 18,198 - 301,579 - investmentsReversal ofdeferredtaxes relatedto impairment (1,353 ) - (22,633 ) - of equitymethodinvestmentChange infair value ofequity (11,951 ) - (196,805 ) - securities,netStock-basedcompensation 631 823 10,391 11,853 chargeTransaction 1,369 2,576 22,544 37,100 costsLoss ondisposal of 13 - 214 - DNIIntangibleasset 121 2,838 1,980 40,863 amortization,netGain ondisposal of - (9,743 ) - (140,322 ) FIHRSTIntangibleassetamortization,net related - 1,217 - 17,528 to equityaccountedinvestmentsFundamental (26,464 ) (6,886 ) (0.47 ) (0.12 ) (434,260 ) (99,184 ) (7.63 ) (1.75 )

Net 1 UEPS Technologies, Inc.

Attachment C

Reconciliation of net loss used to calculate loss per share basic and diluted and headline loss per share basic and diluted:

Three months ended December 31, 2020 and 2019

2020 2019 Net loss (USD?000) (4,534 ) (205 )Adjustments: Impairment of equity method investments 1,354 - Loss on disposal of equity-accounted investment 13 - Gain on disposal of FIHRST - (9,743 ) Loss (Profit) on sale of property, plant and equipment 752 (49 ) Tax effects on above (211 ) 14 Net loss used to calculate headline loss (USD?000) (2,626 ) (9,983 ) Weighted average number of shares used to calculate net lossper share basic loss and headline loss per share basic loss 56,641 56,568 (?000) Weighted average number of shares used to calculate net lossper share diluted loss and headline loss per share diluted 56,641 56,568 loss (?000) Headline loss per share: Basic, in USD (0.05 ) (0.18 ) Diluted, in USD (0.05 ) (0.18 )

Six months ended December 31, 2020 and 2019

2020 2019 Net loss (USD?000) (33,492 ) (4,597 )Adjustments: Impairment of equity method investments 18,198 - Gain on disposal of FIHRST - (9,743 ) Loss (Profit) on sale of property, plant and equipment 742 (203 ) Tax effects on above (1,561 ) 57 Net loss used to calculate headline loss (USD?000) (16,100 ) (14,486 ) Weighted average number of shares used to calculate netloss per share basic loss and headline loss per share 56,880 56,568 basic loss (?000) Weighted average number of shares used to calculate netloss per share diluted loss and headline loss per share 56,880 56,568 diluted loss (?000) Headline loss per share: Basic, in USD (0.28 ) (0.26 ) Diluted, in USD (0.28 ) (0.26 )

Calculation of the denominator for headline diluted loss per share

Q2 Q2 F2021 F2020 2021 2020 Basic weighted-average common sharesoutstanding and unvested restricted shares 56,641 56,568 56,880 56,568expected to vest under GAAP Denominator for headline diluted 56,641 56,568 56,880 56,568 loss per share

Weighted average number of shares used to calculate headline diluted loss per share represents the denominator for basic weighted-average common shares outstanding and unvested restricted shares expected to vest plus the effect of dilutive securities under GAAP. We use this number of fully-diluted shares outstanding to calculate headline diluted loss per share because we do not use the two-class method to calculate headline diluted loss per share.