As the COVID-19 pandemic continues to disrupt business operations, Net1 UEPS Technologies has announced a delay in releasing its quarterly performance report.
Publicly-traded companies are required to submit their quarterly and annual earnings to declare their performance.
According to the regulations, if the deadline is missed, consequences may include loss of registration, de-listing from stock exchanges as well as possible legal consequences.
Net1 has dual listing on the JSE and in the US.
In a statement to shareholders released on the JSE today, the company says the impact of the COVID-19 pandemic has led to disruptions in Net1’s day-to-day activities.
It says due to reduced staffing levels and limited access to facilities and certain technology systems Net1 relies on, the company will not “timely prepare our quarterly report on Form 10-Q for the quarter ended 31 March 2020”.
Currently, there are over 3.5 million COVID-19 cases globally and over 248 000 fatalities, with more than a million recoveries. This has resulted in many countries placing their nations under lockdown to try to minimise the spread of the virus, causing disruptions to business.
Net1 says due to this: “We anticipate that additional time will be required in order to develop and process our financial information as well as prepare the required disclosures related to the impact of COVID-19.
“These circumstances will delay our ability to complete our quarterly report.”
Adding to the COVID-19 challenges, the company is facing other pressing matters locally.
These include cancellation of the contract to distribute social grants with the South African Social Security Agency in the second quarter of 2019. The company distributed grants to more than nine million beneficiaries through its subsidiary, Cash Paymaster Services (CPS).
The social security agency had, from 2012, relied on the services of CPS to pay millions of beneficiaries through cash payments, direct deposits and electronic payments.
The post office took over the payment of social grants from the beginning of October last year.
Net1 also suffered losses in Cell C; Net1 owns 15% shareholding in the telco.
In September, Net1 issued a statement, saying it “believes the fair value of Cell C at 30 June [Net1’s fiscal year end] is nil”.
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