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Net 1 UEPS Technologies Inc. Reports Second Quarter 2014 Results

- Revenue and Fundamental EPS of $137 million and $0.40, a constant currency increase of 43% and 163%, respectively;

JOHANNESBURG, SOUTH AFRICA -- (Marketwired) -- 02/06/14 -- Net 1 UEPS Technologies Inc. (NASDAQ: UEPS)(JSE: NT1) today released results for the second quarter of fiscal 2014.


Summary Financial Metrics

                                            Three months ended December 31,
                                    ---------------------------------------
                                                         % change  % change
                                        2013       2012    in USD    in ZAR
                                    --------  ---------  --------  --------
(All figures in USD '000s except
 per share data)
Revenue                              137,283    111,442       23%       43%
GAAP net income                       12,749      2,629      385%      464%
Fundamental net income (1)            18,399      8,051      129%      166%
GAAP earnings per share ($)             0.28       0.06      382%      461%
Fundamental earnings per share ($)
 (1)                                    0.40       0.18      122%      163%
Fully-diluted shares outstanding
 ('000's)                             46,176     45,597        2%
Average period USD/ ZAR exchange
 rate                                  10.16       8.74       16%

                                              Six months ended December 31,
                                    ---------------------------------------
                                                         % change  % change
                                        2013       2012    in USD    in ZAR
                                    --------  ---------  --------  --------
(All figures in USD '000s except
 per share data)
Revenue                              260,777    223,124       17%       39%
GAAP net income                       24,345      9,373      160%      210%
Fundamental net income (1)            35,174     19,559       80%      114%
GAAP earnings per share ($)             0.53       0.21      159%      208%
Fundamental earnings per share ($)
 (1)                                    0.77       0.43       79%      113%
Fully-diluted shares outstanding
 ('000's)                             45,919     45,593        1%
Average period USD/ ZAR exchange
 rate                                  10.08       8.46       19%

(1) Fundamental net income and earnings per share are non-GAAP measures and are described below under "Use of Non-GAAP Measures-Fundamental net income and fundamental earnings per share." See Attachment B for a reconciliation of GAAP net income to fundamental net income and earnings per share.

Factors impacting comparability of our Q2 2014 and Q2 2013 results


--  Unfavorable impact from the strengthening of the US dollar against the
    ZAR: The US dollar appreciated by 16% against the ZAR during Q2 2014
    which negatively impacted our reported results;
--  SASSA implementation complete: Our SASSA contract implementation is
    complete. We incurred implementation-related expenditure, including
    smart card costs, of approximately $21.0 million during Q2 2013;
--  Higher revenue resulting from an increase in low-margin prepaid airtime
    sales: Our revenue has increased as a result of the growth of our Umoya
    Manje prepaid airtime offering during Q2 2014, which has lower margins
    compared with our other South African businesses;
--  National rollout of our financial services offering: We continued the
    national roll out of our financial services offering during Q2 2014,
    which resulted in higher revenue from UEPS-based lending. Profitability
    in the financial services segment however was lower due to rollout
    costs, including hiring and training of additional staff and
    infrastructure deployment as well as the creation of an allowance for
    doubtful finance loans receivable;
--  Increased contribution by KSNET: Our results were positively impacted by
    growth in our Korean operations; and
--  Ad hoc hardware sales in fiscal 2014: We sold more terminals and cards
    during Q2 2014 as a result of ad hoc orders received from our customers.

Comments and Outlook

"I am delighted that Net1 is once again demonstrating that it is a growth business, as illustrated by our second quarter and first half results. The last 15 months have been challenging for the Company and its staff, not because of our abilities, potential or execution, but rather because of the negative press coverage we have received for no justifiable reason. I wanted Net1 to emphatically respond, not with press releases, but through its achievements and financial performance," said Dr. Serge Belamant, Chairman and Chief Executive Officer of Net1.

"I am particularly delighted that we have now completed bulk registration as per our SASSA contract, and that our technology is running as smoothly as expected, thereby delivering the highest level of service to all our clients anytime and anywhere in the country. We continue to introduce financial or value-added services to our offerings, which we primarily deliver via mobile phones thus reaching our customers even if they reside in the most rural or underserviced areas of South Africa. I am proud that we have facilitated financial inclusion for so many people who have now access to affordable and relevant products designed to improve their livelihood," he concluded.

"Having completed our significant implementation investments in fiscal 2013, we see continued momentum as a result of the execution of our strategy, in turn driving top and bottom line growth," said Herman Kotze, Chief Financial Officer of Net1. "Taking into account the anticipated issuance of 4.4 million shares as part of our proposed BEE transaction around March 15, 2014, for fiscal 2014 we expect fundamental earnings per share of at least $1.60 assuming a constant currency base of ZAR 8.71/$1. The share count assumption in our guidance includes a little more than one quarter of the shares related to our proposed BEE transaction," he concluded.

Results of Operations by Segment and Liquidity

Our operating metrics will be updated and posted on our website (www.net1.com).

South African transaction-based activities

Segment revenue was $72.2 million in Q2 2014, up 19% compared with Q2 2013 in USD and up 38% on a constant currency basis. In ZAR, the increases in segment revenue were primarily due to higher volumes from the growth of our Umoya Manje prepaid airtime product and from higher transaction activity through the South African National Payment System, both of which have lower margins than our traditional businesses. Segment operating income margin was 19% and 3%, respectively, and increased primarily due to the absence of SASSA implementation costs in Q2 2014. Excluding amortization of acquisition-related intangibles, Q2 2014 segment operating income margin was 19% compared with 6% in Q2 2013.

International transaction-based activities

KSNET contributes the majority of our revenues and operating income in this segment. Segment revenue was $37.2 million in Q2 2014, up 13% compared with Q2 2013 in USD and 31% on a constant currency basis. The increase in segment revenue was primarily due to growth at KSNET during Q2 2014, and was partially offset by the expiration and non-renewal of NUETS' contract with its Iraqi customer in Q3 2013. Operating income during Q2 2014 was positively impacted by growth at KSNET but partially offset by the loss of the Iraqi contract, continued losses related to our XeoHealth and Net1 Virtual Card launches in the United States, as well as ongoing competition in the Korean marketplace. Excluding the amortization of intangibles, Q2 2014 operating income margin was 13% compared to 11% during Q2 2013.

Smart card accounts

Segment revenue was $11.2 million in Q2 2014, up 37% compared with Q2 2013 in USD and 59% on a constant currency basis driven exclusively by the increase in the number of smart card accounts. Segment operating income margin from providing smart card accounts for Q2 2014 and 2013 was 29% and 28%, respectively.

Financial services

UEPS-based lending contributes the majority of the revenue and operating income in this segment. Segment revenue was $6.2 million in Q2 2014, up 328% compared with Q2 2013 in USD and 398% higher on a constant currency basis, principally due to the increase in the number of loans granted as we rolled out our product nationally. Q2 2014 segment operating income margin was 28% compared with 72% during Q2 2013, lower primarily due to an increase in start-up expenses, establishment of the allowance for doubtful finance loans receivable and the re-allocation of UEPS-based lending corporate and administration overhead expenses to this segment. Smart Life did not contribute to operating income in the first quarter of fiscal 2014 as it is currently unable to issue new insurance policies as a result of the suspension of its license by the Financial Services Board in fiscal 2013.

Hardware, software and related technology sales

Segment revenue was $10.3 million in Q2 2014, up 31% compared with Q2 2013 in USD and 52% on a constant currency basis. The increase in revenue and operating income resulted from higher ad hoc terminal and smart card sales. Excluding amortization of all intangibles, segment operating income margin was 16% compared to 11% during Q2 2013.

Corporate/eliminations

The increase in our corporate expenses resulted primarily from legal fees we incurred in connection with the DOJ and SEC investigations and other corporate head office-related expenses.

Cash flow and liquidity

At December 31, 2013, we had cash and cash equivalents of $22.4 million, down from $53.7 million at June 30, 2013. The decrease in our cash balances from June 30, 2013, was primarily due to the expansion of our UEPS-based lending business, working capital changes, the repayment of a portion of our Korean debt and acquisition of substantially all of the remaining shares of KSNET that we did not already own. During December 2013, we temporarily increased our short-term South African credit facility to ZAR 650 million (comprising a ZAR 500 million overdraft facility to enable us to fund additional working capital requirements and ZAR 150 million of indirect and overdraft facilities). The overdraft portion of the facility will be reduced to ZAR 400 million on March 31, 2014.

Excluding the impact of interest received, interest paid under our Korean debt and taxes, the decrease in cash from operating activities resulted from the expansion of our UEPS-based lending book and the timing of prefunding related to the January 2014 payment cycle, offset by improved cash generated from operating activities and the substantial elimination of implementation costs related to our SASSA contract in fiscal 2014. Capital expenditures for Q2 2014 and 2013 were $6.8 million and $5.6 million, respectively, and have increased primarily due to the acquisition of more payment processing terminals in Korea.

Use of Non-GAAP Measures

US securities laws require that when we publish any non-GAAP measures, we disclose the reason for using the non-GAAP measure and provide reconciliation to the directly comparable GAAP measure. The presentation of fundamental net income and fundamental earnings per share and headline earnings per share are non-GAAP measures.

Fundamental net income and fundamental earnings per share

Fundamental net income and earnings per share is GAAP net income and earnings per share adjusted for (1) the amortization of acquisition-related intangible assets (net of deferred taxes), (2) stock-based compensation charges and (3) unusual non- recurring items, including the amortization of KSNET debt facility fees and DOJ and SEC investigations-related expenses, as well as in fiscal 2013, acquisition-related costs. Management believes that the fundamental net income and earnings per share metric enhances its own evaluation, as well as an investor's understanding, of our financial performance. Attachment B presents the reconciliation between GAAP and fundamental net income and earnings per share.

Headline earnings per share ("HEPS")

The inclusion of HEPS in this press release is a requirement of our listing on the JSE. HEPS basic and diluted is calculated using net income which has been determined based on GAAP. Accordingly, this may differ to the headline 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.

HEPS basic and diluted is calculated as GAAP net income adjusted for the profit on sale of property, plant and equipment, net of related tax effects. Attachment C presents the reconciliation between our net income used to calculate earnings per share basic and diluted and HEPS basic and diluted and the calculation of the denominator for headline diluted earnings per share.

Conference Call

We will host a conference call to review Q2 2014 results on February 7, 2014, at 8:00 Eastern Time. To participate in the call, dial 1-855-481-5362 (US and Canada), 0808-162-4061 (U.K. only) or 0-800-200-648 (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 through March 2, 2014.

About Net1 (www.net1.com)

Net1 is a leading provider of alternative payment systems that leverage its Universal Electronic Payment System, or UEPS, to facilitate biometrically secure, real-time electronic transaction processing to unbanked and under-banked populations of developing economies around the world in an online or offline environment. Net1's UEPS/EMV solution is also completely interoperable with global EMV standards that seamlessly permit access to all the UEPS functionality in a traditional EMV environment. In addition to payments, UEPS can be used for banking, healthcare management, payroll, remittances, voting and identification.

Net1 operates market-leading payment processors in South Africa, Republic of Korea, and Ghana. In addition, Net1's proprietary Mobile Virtual Card technology offers secure mobile payments and banking services in developed and emerging countries while its MediKredit and XeoHealth subsidiaries provide its proprietary 5010 and ICD-10 compliant real-time claims adjudication system.

Net1 has a primary listing on the Nasdaq and a secondary listing on the JSE Limited.

Forward-Looking Statements

This announcement contains forward-looking statements that involve known and unknown risks and uncertainties. A discussion of various factors that 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. In addition, statements relating to our proposed BEE transaction are forward-looking statements. The letter of intent described in this announcement is non-binding and is subject to the completion of definitive documentation that will provide for the satisfaction of conditions to be contained therein before any shares are issued. There can be no assurance that we will enter into definitive agreements on the terms set forth herein, if at all. We undertake no obligation to revise any of these statements to reflect future events.


                        NET 1 UEPS TECHNOLOGIES INC.
         Unaudited Condensed Consolidated Statements of Operations
                                 Three months ended        Six months ended
                                -------------------  -----------------------
                                       December 31,            December 31,
                                -------------------  -----------------------
                                    2013       2012        2013        2012
                                --------   --------  ----------   ----------
                               (In thousands, except  (In thousands, except
                                     per share data)        per share data)

REVENUE                         $137,283  $ 111,442   $ 260,777  $  223,124

EXPENSE

  Cost of goods sold, IT
   processing, servicing and
   support                        67,883     47,227     124,442      92,328

  Selling, general and
   administration                 40,824     48,756      81,330      96,008

  Depreciation and amortization    9,774     10,487      19,803      20,491
                                --------   --------    --------   ----------

OPERATING INCOME                  18,802      4,972      35,202      14,297

INTEREST INCOME                    3,236      2,589       6,555       5,680

INTEREST EXPENSE                   2,226      2,023       3,978       4,094
                                --------   --------    --------   ----------

INCOME BEFORE INCOME TAXES        19,812      5,538      37,779      15,883

INCOME TAX EXPENSE                 7,099      2,971      13,584       6,700
                                --------   --------    --------   ----------

NET INCOME BEFORE EARNINGS FROM
 EQUITY-ACCOUNTED INVESTMENTS     12,713      2,567      24,195       9,183

EARNINGS FROM EQUITY-ACCOUNTED
 INVESTMENTS                          47         54         150         182
                                --------   --------    --------   ----------

NET INCOME                        12,760      2,621      24,345       9,365

LESS (ADD) NET INCOME (LOSS)
 ATTRIBUTABLE TO NON-
 CONTROLLING INTEREST                 11         (8)          -          (8)
                                --------   --------    --------   ----------

NET INCOME ATTRIBUTABLE TO NET1 $ 12,749  $   2,629   $  24,345  $    9,373
                                -=======   ========    ========   ==========

Net income per share, in United
 States dollars
  Basic earnings attributable
   to Net1 shareholders         $   0.28  $    0.06   $    0.53  $     0.21
  Diluted earnings attributable
   to Net1 shareholders         $   0.28  $    0.06   $    0.53  $     0.21


                        NET 1 UEPS TECHNOLOGIES INC.
               Unaudited Condensed Consolidated Balance Sheets
                                                    Unaudited           (A)
                                                 December 31,      June 30,
                                                         2013          2013
                                                  ------------ -------------
                                                  ------------ -------------
                                                (In thousands, except share
                                                                      data)
                   ASSETS
CURRENT ASSETS
  Cash and cash equivalents                      $     22,362  $     53,665
  Pre-funded social welfare grants
   receivable                                           7,971         2,934
  Accounts receivable, net of allowances of
   - December: $1,326; June: $4,701                   125,062       102,614
  Finance loans receivable, net of
   allowances of - December: $1,813; June:
   $-                                                  42,847         8,350
  Inventory                                            13,537        12,222
  Deferred income taxes                                 5,001         4,938
                                                  ------------  ------------
    Total current assets before settlement
     assets                                           216,780       184,723
      Settlement assets                               466,599       752,476
                                                  ------------  ------------
        Total current assets                          683,379       937,199
PROPERTY, PLANT AND EQUIPMENT, NET OF
 ACCUMULATED
DEPRECIATION OF - December: $87,536; June:
 $84,808                                               47,619        48,301
EQUITY-ACCOUNTED INVESTMENTS                            1,290         1,183
GOODWILL                                              181,111       175,806
INTANGIBLE ASSETS, NET OF ACCUMULATED
 AMORTIZATION OF - December: $72,696; June:
 $63,767                                               73,874        77,257
OTHER LONG-TERM ASSETS, including
 reinsurance assets                                    34,271        36,576
                                                  ------------  ------------
    TOTAL ASSETS                                    1,021,544     1,276,322
                                                  ------------  ------------
                 LIABILITIES
CURRENT LIABILITIES
  Bank Overdraft                                       24,256             -
  Accounts payable                                     13,689        26,567
  Other payables                                       34,386        33,808
  Current portion of long-term borrowings              14,108        14,209
  Income taxes payable                                  3,479         2,275
                                                  ------------  ------------
    Total current liabilities before
     settlement obligations                            89,918        76,859
      Settlement obligations                          466,599       752,476
                                                  ------------  ------------
                                                  ------------  ------------
        Total current liabilities                     556,517       829,335
DEFERRED INCOME TAXES                                  18,261        18,727
LONG-TERM BORROWINGS                                   57,452        66,632
OTHER LONG-TERM LIABILITIES, including
 insurance policy liabilities                          20,131        21,659
                                                  ------------  ------------
                                                  ------------  ------------
    TOTAL LIABILITIES                                 652,361       936,353
                                                  ------------  ------------
                                                  -----------   ------------
COMMITMENTS AND CONTINGENCIES

                   EQUITY
  COMMON STOCK
    Authorized: 200,000,000 with $0.001 par
     value;
    Issued and outstanding shares, net of
     treasury - December: 45,773,342; June:
     45,592,550                                            59            59
  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                          164,060       160,670
  TREASURY SHARES, AT COST: December:
   13,455,090; June: 13,455,090                      (175,823)     (175,823)
  ACCUMULATED OTHER COMPREHENSIVE LOSS                (96,103)     (100,858)
  RETAINED EARNINGS                                   476,963       452,618
                                                  ------------  ------------
    TOTAL NET1 EQUITY                                 369,156       336,666
    NON-CONTROLLING INTEREST                               27         3,303
                                                  ------------  ------------
      TOTAL EQUITY                                    369,183       339,969
                                                  ------------  ------------
                                                  ------------  ------------
        TOTAL LIABILITIES AND SHAREHOLDERS'
         EQUITY                                  $  1,021,544  $  1,276,322
                                                  ------------  ------------
                                                  ------------  ------------
(A) - Derived from audited financial statements


                        NET 1 UEPS TECHNOLOGIES INC.
          Unaudited Condensed Consolidated Statements of Cash Flows
                                    Three months ended     Six months ended
                                 ----------------------  ------------------
                                          December 31,         December 31,
                                    -------------------  -------------------
                                        2013      2012       2013      2012
                                    ---------  --------  ---------  -------
                                      (In thousands)       (In thousands)
Cash flows from operating
 activities
Net income                         $  12,760  $  2,621  $  24,345  $  9,365
Depreciation and amortization          9,774    10,487     19,803    20,491
Earnings from equity-accounted
 investments                             (47)      (54)      (150)     (182)
Fair value adjustments                    72     1,000        (61)      707
Interest payable                         694     1,117      1,666     2,309
Profit on disposal of property,
 plant and equipment                     (15)      (86)       (16)      (86)
Stock-based compensation charge          968     1,117      1,898     2,233
Facility fee amortized                   509        76        578       164
(Increase) Decrease in accounts
 receivable, pre-funded social
 welfare grants receivable and
 finance loans receivable            (37,977)   (5,061)   (61,078)      831
Increase in inventory                 (2,853)   (6,250)    (1,842)   (7,209)
Decrease in accounts payable and
 other payables                       (4,883)   (4,939)   (13,551)   (6,288)
(Decrease) increase in taxes
 payable                              (5,559)   (6,032)     1,362      (594)
Decrease in deferred taxes              (691)     (916)    (1,878)   (2,932)
                                    ---------  --------  ---------  --------
  Net cash (used in) provided by
   operating activities              (27,248)   (6,920)   (28,924)   18,809
                                    ---------  --------  ---------  --------
Cash flows from investing
 activities
Capital expenditures                  (6,845)   (5,597)   (12,461)  (12,050)
Proceeds from disposal of
 property, plant and equipment         1,953       251      2,001       356
Acquisitions, net of cash
 acquired                                  -      (230)         -    (2,143)
Repayment of loan by equity-
 accounted investment                      -         -          -         3
Proceeds from maturity of
 investments related to insurance
 business                                  -         -          -       545
Other investing activities                 -         -         (1)        -
Net change in settlement assets      204,730   (72,835)   256,503   (12,056)
                                    ---------  --------  ---------  --------
  Net cash provided by (used in)
   investing activities              199,838   (78,411)   246,042   (25,345)
                                    ---------  --------  ---------  --------
Cash flows from financing
 activities
Long-term borrowings obtained         71,605         -     71,605         -
Repayment of long-term borrowings    (87,008)   (7,307)   (87,008)   (7,307)
Payment of facility fee                 (872)        -       (872)        -
Proceeds from bank overdraft          24,580         -     24,580         -
Acquisition of interests in KSNET     (1,968)        -     (1,968)        -
Proceeds from issue of common
 stock                                     -         -          -       240
Net change in settlement
 obligations                        (204,730)   72,835   (256,503)   12,056
                                    ---------  --------  ---------  --------
  Net cash (used in) provided by
   financing activities             (198,393)   65,528   (250,166)    4,989
                                    ---------  --------  ---------  --------
Effect of exchange rate changes
 on cash                                 495       375      1,745       540
                                    ---------  --------  ---------  --------
Net decrease in cash and cash
 equivalents                         (25,308)  (19,428)   (31,303)   (1,007)
Cash and cash equivalents -
 beginning of period                  47,670    57,544     53,665    39,123
                                    ---------  --------  ---------  --------
Cash and cash equivalents - end
 of period                         $  22,362  $ 38,116  $  22,362  $ 38,116
                                    ---------  --------  ---------  --------
                                    ---------  --------  ---------  --------

Net 1 UEPS Technologies Inc.

Attachment A

Operating segment revenue, operating income and operating margin:

Three months ended December 31, 2013 and 2012 and September 30, 2013




Key segmental data, in $ '000,            Q2 '14       Q2 '13
                                   -------------   ----------
  Revenue:
   SA transaction-based activities $      72,237 $     60,764
   International transaction-based
    activities                            37,288       33,113
   Smart card accounts                    11,237        8,219
   Financial services                      6,199        1,448
   Hardware, software and related
    technology sales                      10,322        7,898
                                   -------------  -------------
      Total consolidated revenue   $     137,283  $   111,442
                                   -------------  -------------
                                   -------------  -------------

Consolidated operating income
 (loss):
   SA transaction-based activities $      13,398  $     1,933
                                   -------------- -------------
     Operating income (loss)
      excluding amortization              13,916        3,398
     Amortization of intangible
      assets                                (518)      (1,465)
                                   -------------- -------------
   International transaction-based
    activities                             1,365          202
                                   -------------- -------------
     Operating income excluding
      amortization                         4,883        3,515
     Amortization of intangible
      assets                              (3,518)      (3,313)
                                   -------------- -------------
   Smart card accounts                     3,203        2,342
   Financial services                      1,727        1,048
   Hardware, software and related
    technology sales                       1,592          795
                                   -------------- -------------
     Operating income (loss)
      excluding amortization               1,663          878
     Amortization of intangible
      assets                                 (71)         (83)
                                   -------------- -------------
   Corporate/ Eliminations                (2,483)      (1,348)
                                   -------------- -----------
     Total operating income (loss) $      18,802  $     4,972
                                   -------------- -------------
                                   -------------- -------------

Operating income margin (%)
   SA transaction-based activities            19%           3%
   International transaction-based
    activities                                 4%           1%
   International transaction-based
    activities excluding
    amortization                              13%          11%
   Smart card accounts                        29%          28%
   Financial services                         28%          72%
   Hardware, software and related
    technology sales                          15%          10%
   Overall operating margin                   14%           4%

                                                                    Change -
                                                                    constant
                                                                    exchange
                                             Change - actual         rate(1)
                                            ---------------- ---------------
                                             Q2 '14   Q2 '14  Q2 '14  Q2 '14
                                                 vs       vs      vs      vs
Key segmental data, in $ '000,       Q1 '14   Q2'13   Q1 '14   Q2'13  Q1 '14
                                   -------- ------- -------- ------- -------
  Revenue:
   SA transaction-based activities $ 63,032    19%      15%     38%     16%
   International transaction-based
    activities                       36,817    13%       1%     31%      3%
   Smart card accounts               11,329    37%      (1%)    59%      1%
   Financial services                 2,427   328%     155%    398%    159%
   Hardware, software and related
    technology sales                  9,889    31%       4%     52%      6%
                                   --------
      Total consolidated revenue   $123,494    23%      11%     43%     13%
                                   ---------
                                   ---------

Consolidated operating income
 (loss):
   SA transaction-based activities $ 13,282   593%       1%    706%      2%
                                   -----------------------------------------
     Operating income (loss)
      excluding amortization         13,808   310%       1%    376%      2%
     Amortization of intangible
      assets                           (526)  (65%)     (2%)   (59%)     0%
                                   -----------------------------------------
   International transaction-based
    activities                        2,051   576%     (33%)   685%    (32%)
                                   -----------------------------------------
     Operating income excluding
      amortization                    5,200    39%      (6%)    61%     (5%)
     Amortization of intangible
      assets                         (3,149)    6%      12%     23%     13%
                                   -----------------------------------------
   Smart card accounts                3,228    37%      (1%)    59%     1%
   Financial services                    56    65%      nm      92%     nm
   Hardware, software and related
    technology sales                  2,948   100%     (46%)   133%    (45%)
                                   ------------------------- ---------------
     Operating income (loss)
      excluding amortization          3,021    89%     (45%)   120%    (44%)
     Amortization of intangible
      assets                            (73)  (14%)     (3%)    (1%)    (1%)
                                   -----------------------------------------
   Corporate/ Eliminations           (5,165)   84%     (52%)   114%    (51%)
                                   ---------
     Total operating income (loss) $ 16,400   278%      15%    340%     16%
                                   ---------
                                   ---------

Operating income margin (%)
   SA transaction-based activities       21%
   International transaction-based
    activities                            6%
   International transaction-based
    activities excluding
    amortization                         14%
   Smart card accounts                   28%
   Financial services                     2%
   Hardware, software and related
    technology sales                     30%
   Overall operating margin              13%
(1) - This information shows what the change in these items would have been
if the USD/ ZAR exchange rate that prevailed during the second quarter of
fiscal 2014 also prevailed during the second quarter of fiscal 2013 and the
first quarter of fiscal 2014.
Six months ended December 31, 2013
 and 2012

                                                                  Change -
                                                                  constant
                                                          Change
                                                               -  exchange
                                                          actual   rate(1)
                                                         -------  --------
                                                           F2014     F2014
                                                              vs        vs
Key segmental data, in '000, except     F2014     F2013    F2013     F2013
 margins
                                     --------  --------  -------  --------
 Revenue:
   SA transaction-based activities   $135,269  $122,128       11%       32%
   International transaction-based
    activities                         74,105    64,762       14%       36%
   Smart card accounts                 22,566    16,583       36%       62%
   Financial services                   8,626     2,832      205%      263%
   Hardware, software and related
    technology sales                   20,211    16,819       20%       43%
                                     --------  --------
    Total consolidated revenue       $260,777  $223,124       17%       39%
                                     --------- ---------
                                     --------- ---------
 Consolidated operating income
  (loss):
   SA transaction-based activities   $ 26,680  $  8,333      220%      282%
                                     --------- --------- -------------------
    Operating income excluding
     amortization                      27,724    11,264      146%      193%
    Amortization of intangible
     assets                            (1,044)   (2,931)     (64%)     (58%)
                                     --------- --------- -------------------
   International transaction-based
    activities                          3,416        31       nm        nm
                                     --------- --------- -------------------
    Operating income excluding
     amortization                      10,024     6,499       54%       84%
    Amortization of intangible
     assets                            (6,608)   (6,468)       2%       22%
                                     --------- --------- -------------------
   Smart card accounts                  6,431     4,727       36%       62%
   Financial services                   1,783     2,145      (17%)      (1%)
   Hardware, software and related
    technology sales                    4,540     2,779       63%       95%
                                     --------- --------- -------------------
    Operating income excluding
     amortization                       4,683     2,948       59%       89%
    Amortization of intangible
     assets                              (143)     (169)     (15%)       1%
                                     --------- --------- -------------------
   Corporate/ Eliminations             (7,648)   (3,718)     106%      145%
                                     --------- ---------
    Total operating income           $ 35,202  $ 14,297      146%      193%
                                     --------- ---------
                                     --------- ---------
 Operating income margin (%)
   SA transaction-based activities         20%        7%
   International transaction-based
    activities                              5%        0%
   International transaction-based
    activities excluding
    amortization                           14%       10%
   Smart card accounts                     28%       29%
   Financial services                      21%       76%
   Hardware, software and related
    technology sales                       22%       17%
   Overall operating margin                13%        6%

(1) - This information shows what the change in these items would have been
if the USD/ ZAR exchange rate that prevailed during the first half of fiscal
2014 also prevailed during the first half of fiscal 2013.


Net 1 UEPS Technologies Inc.

Attachment B

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

Three months ended December 31, 2013 and 2012


                                          EPS,                       EPS,
                         Net income       basic      Net income      basic
                          (USD'000)       (USD)      (ZAR'000)       (ZAR)
                       -------------- ----------  --------------- ----------
                          2013   2012 2013  2012     2013    2012  2013 2012
                       ------- ------ ---- -----  ------- ------- ----- ----

GAAP                    12,749  2,629 0.28  0.06  129,519  22,979  2.83 0.50

  Intangible asset
   amortization, net.    3,104  3,640              31,530  31,817
  Stock-based
   compensation charge     968  1,117               9,834   9,763
  Facility fees for
   KSNET debt              509     76               5,171     664
  DOJ and SEC
   investigations-
   related expenses      1,068    561              10,850   4,903
  Acquisition-related
   costs                     -     28                   -     245
                       --------------             ---------------
    Fundamental         18,398  8,051 0.40  0.18  186,904  70,371  4.08 1.55
                       --------------             ---------------
                       --------------             ---------------


Six months ended December 31, 2013 and 2012

                                            EPS,                       EPS,
                           Net income      basic       Net income      basic
                            (USD'000)      (USD)        (ZAR'000)      (ZAR)
                       -------------- ----------  --------------- ----------
                          2013   2012 2013  2012     2013    2012  2013 2012
                       ------- ------ ---- -----  ------- ------- ----- ----

GAAP                    24,345  9,373 0.53  0.21  245,417  79,268  5.37 1.74

  Intangible asset
   amortization, net.    5,889  7,155              59,367  60,518
  Stock-based
   compensation charge   1,898  2,233              19,134  18,885
  Facility fees for
   KSNET debt              578    164               5,827   1,387
  DOJ and SEC
   investigations-
  related expenses       2,464    561              24,839   4,744
  Acquisition-related
   costs                     -     73                   -     617
                       --------------             ---------------
    Fundamental         35,174 19,559 0.77  0.43  354,584 165,419  7.75 3.63
                       --------------             ---------------
                       --------------             ---------------


Net 1 UEPS Technologies Inc.

Attachment C

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

Three months ended December 31, 2013 and 2012

                                                           2013        2012
                                                      ---------   ---------
Net income (USD'000)                                     12,749       2,629
Adjustments:
  Profit on sale of property, plant and equipment           (15)        (86)
  Tax effects on above                                        4          24
                                                      ---------   ---------
Net income used to calculate headline earnings
 (USD'000)                                               12,738       2,567
                                                      ---------   ---------
                                                      ---------   ---------
Weighted average number of shares used to calculate
 net income per share basic earnings and headline
 earnings per share basic earnings ('000)                45,776      45,545
Weighted average number of shares used to calculate
 net income per share diluted earnings and headline
 earnings per share diluted earnings ('000)              46,176      45,597
Headline earnings per share:
  Basic, in USD                                            0.28        0.06
  Diluted, in USD                                          0.28        0.06


Six months ended December 31, 2013 and 2012

                                                           2013        2012
                                                      ---------   ---------
Net income (USD'000)                                     24,345       9,373
Adjustments:
  Profit on sale of property, plant and equipment           (16)        (86)
  Tax effects on above                                        4          24
                                                      ---------   ---------
Net income used to calculate headline earnings
 (USD'000)                                               24,333       9,311
                                                      ---------   ---------
                                                      ---------   ---------
Weighted average number of shares used to calculate
 net income per share basic earnings and headline
 earnings per share basic earnings ('000)                45,725      45,530
Weighted average number of shares used to calculate
 net income per share diluted earnings and headline
 earnings per share diluted earnings ('000)              45,919      45,593
Headline earnings per share:
  Basic, in USD                                            0.53        0.20
  Diluted, in USD                                          0.52        0.20


Calculation of the denominator for headline diluted earnings per share

                                           Q2 '14   Q2 '13    F2014    F2013
                                         -------- -------- -------- --------

  Basic weighted-average common shares
   outstanding and unvested restricted
   shares expected to vest under GAAP      45,776   45,545   45,725   45,530
    Effect of dilutive securities
     under GAAP                               400       52      194       63
                                         -------- -------- -------- --------
      Denominator for headline diluted
       earnings per share                  46,176   45,597   45,919   45,593
                                         -------- -------- -------- --------
                                         -------- -------- -------- --------

Weighted average number of shares used to calculate headline earnings per share diluted represent 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 earnings per share diluted because we do not use the two-class method to calculate headline earnings per share diluted.

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