Net 1 UEPS Technologies, Inc. (UEPS) has reported a marginal fall of 0.15 percent in profit for the quarter ended Mar. 31, 2017. The company has earned $18.39 million, or $0.34 a share, compared with $18.42 million or $0.40 a share, a year ago. On the other hand, adjusted net income for the quarter stood at $23.47 million, or $0.43 a share compared with $19.79 million or $0.43 a share, a year ago. Revenue during the quarter grew 9.80 percent to $147.94 million from $134.74 million in the previous year period. Gross margin for the quarter contracted 98 basis points over the previous year period to 52.07 percent. Total expenses were 83.41 percent of quarterly revenues, up from 80.56 percent for the same period last year. That has resulted in a contraction of 285 basis points in operating margin to 16.59 percent.
Operating income for the quarter was $24.55 million, compared with $26.19 million in the previous year period.
"The last few months have been challenging, aggravated by the tarnishing of our reputation and questioning of our business practices due to frivolous and unsubstantiated public attacks. Although we devoted a substantial amount of time to manage these issues, we believe that we have made sufficient progress towards the finalization of our South African and international expansion strategy," said Serge Belamant, chief executive officer of Net1. "Consistent with our service delivery track record over the last five years, the distribution of grants in April and May has gone smoothly and without any delay or interruption and we continue to fulfill our obligations in accordance with the Constitutional Court's order. We remain willing to support a smooth transition to SASSA or whomever they determine to be the most suitable service provider when our current contract expires. In the interim, we continue to provide seamless and timely access to grants for beneficiaries and our technology continues to save the South African government an estimated ZAR 2 billion per annum through the identification and removal of fraudulent beneficiaries," he added.
Operating cash flow improves
Net 1 UEPS Technologies, Inc. has generated cash of $91.41 million from operating activities during the nine month period, up 12.37 percent or $10.06 million, when compared with the last year period. Cash flow from investing activities was $15.63 million for the nine month period, down 88.25 percent or $117.37 million, when compared with the last year period. It has incurred net capital expenditure of $7.15 million on net basis during the nine month period, down 74.40 percent or $20.79 million from year ago period.
The company has spent $71 million cash to carry out financing activities during the nine month period as against cash outgo of $189.56 million in the last year period.
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