NETeller Posts $185.7M Loss for 2007

admin — Wed, 19 Mar 2008 12:03:51 +0000

NETeller Plc has announced a sizeable loss for the 2007 fiscal year, with the largest share of the company’s $185.7 million in red ink attributable to the online payment processor’s withdrawal from the US market.

The $185.7 million figure included $136 million in settlement fees that the firm paid to the US government, following the US’s seizure of NETeller funds in transit to and from American customers. That seizure took place in late January of 2007, just after the highly publicized arrests by US authorities of Canadian NETeller founders Stephen Lawrence and John Lefebvre. Lawrence and Lefebvre were no longer connected with NETeller at the time of the arrests but the US crackdown
precipitated NETeller’s withdrawal from the American market.

Also contributing to NETeller’s rough 2007 was a total of $37 million in restructuring expenses connected to the relocation of its corporate headquarters from Canada to the Isle of Man, off Britain’s coast. The total of $185.7 million in losses wiped out the gains made in a solid 2006, when the firm reported total profits of more than $107 million.

NETeller reported some positive indicators, despite the overall rough news. Cash flow for the second half of 2007 was positive, and both European and Asia Pacific revenues were up during the year, by 28% and 44%, respectively. The two regions contributed most of the company’s $84 million in revenue during the year.

2008′s results already include one major charge and one major proceeds source. NETeller’s final payment to the US government — $38.25 million – was made on January 16, 2008 and will show up in next year’s numbers. That last payment will be offset to some extent by NETeller’s successful sale of its former Calgary, Alberta headquarters. The net proceeds from that sale are $33 million and will be receivable as of March 31, 2008. As of 2007 year end, NETeller maintained $80.8 million in cash and cash equivalents.

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Neteller Issues Outlook and Deadline Reminder

admin — Thu, 17 Jan 2008 22:01:58 +0000

While many poker players have long since had a fading interest in NETeller’s well-being, there are many that should pay heed to the online payment processor’s latest press release. While NETeller announced it had reimbursed $81 million to US customers affected by the company’s account freeze in early 2007, there is still approximately $13 million that has gone unclaimed. Former US account holders have only until January 26th to claim their assets using the NETeller website.

In other NETeller news, their most recent announcement confirmed that they will be making their final payment of $38.25 million to US authorities on January 16th in accordance with their $136 million settlement. It may be a
little harder for the company to make the payment than they expected when they cut the agreement. NETeller’s deal to sell their Calgary property holdings, scheduled to close in the fourth quarter of 2007, has been postponed. It seems that the North American credit woes have affected the terms of the potential purchaser’s loan, no longer satisfying the Purchase and Sale Agreement for the property. According to NETeller’s August 23, 2007 Interim Results, the property deal was valued at close to $40 million, which would have covered their US settlement nut nicely.

NETeller also announced that they recently paid CAD $1.75 million to settle a third-party vendor suit for alleged breach of contract. The vendor’s name was not released.

Other than all that, NETeller is “confident” with its financial performance thus far this year and it is doing a myriad of things that are “building momentum in 2008.” The company’s next update will be the announcement of its preliminary results for the 2007 year. Those results are due to be released on Tuesday, March 11, 2008.

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NETeller Posts $185.7M Loss for 2007

Neteller Issues Outlook and Deadline Reminder