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EML Plunges 40% on Profit Guidance

EML Payments Ltd shares are tumbling today after the company released an announcement detailing their third quarter profit guidance.

By the end of the day, shares in the payment solutions company were trading at $1.66 each, which represents almost a 40% fall.

The company’s third-quarter FY2022 results included:

  • EBITDA dropped 14% on prior corresponding period (PCP) to $13.6 million

  • Underlying net profit after tax amortisation (NPATA) fell 22% on PCP to $13.6 million

  • Gross debt volume surged 408% on PCP to $23.9 billion

  • EBITDA guidance for FY22 cut by 8% to $52-$55 million

  • Revenue jumped 21% on PCP to $59.8 million

Underpinning this result was the operating performance of the company’s European prepaid business which EML payments described as “significantly behind”. This business has been impacted by remediation activities.

EML is expecting more challenges in the fourth quarter, leading to “a reduction in the guidance range”. Commenting on this fall, EML said:

"Deterioration in current FX forecast rates from the prevailing rates in mid February are driving approximately $1.5m of the guidance reduction."

Subject to regulatory approval, EML is planning to invest in EUR bonds. The company is also undertaking a project to find efficiency opportunities globally and combat the cost pressure of inflation.

The EML share price has fallen 67% in the past 12 months, and despite the fall still maintains over $660 million.

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