Source: Euronet Worldwide
Euronet Worldwide, Inc. ("Euronet" or the "Company") (NASDAQ: EEFT), a leading electronic payments provider, today announced it has been informed that Visa Europe ("Visa") notified its member banks that it will lower the Polish domestic ATM interchange fee from PLN 3.50 to PLN 1.30 (from approximately USD $1.20 to approximately $0.45, at current exchange rates), effective May 1, 2010. The interchange fee is paid by issuers of Visa logo'd cards to the owners or operators of ATMs for transactions such as cash withdrawals on ATMs. While this announcement has no impact on first quarter 2010 results, Euronet expects the impact of this fee adjustment on the results of operations of its Polish business to be significant in future periods.
Currently, Euronet has approximately 1,500 Company-owned ATMs under management in Poland, provides outsourced management services to Polish financial institutions and, through network participation agreements, makes its 2,560 ATMs available to financial institutions in Poland. Approximately 25% of Euronet's 10,283 operated ATMs are in Poland and approximately 7.5% of Euronet consolidated revenue is earned in Poland.
Because the reduction in the interchange fee has various direct and indirect impacts on the results of operations of the Polish business, the Company cannot predict the effects of the reduction with certainty. The Company currently expects that the lower Polish interchange fee will reduce Euronet's pre-tax profits by approximately $5.6 million and $5.0 million in 2010 and 2011, respectively and after tax profits by approximately $4.4 million and $4.0 million, respectively, based on current exchange rates. For the remainder of 2010, Euronet estimates the quarterly pre-tax profit impact to be approximately $1.5 million in the second quarter, approximately $2.8 million in the third quarter and approximately $1.3 million in the fourth quarter. The decrease in projected loss between 2010 and 2011 is principally the result of anticipated cost savings from renegotiated vendor service contracts and, to a lesser extent, additional ATM transactions processed as a result of lower interchange fees charged to cardholders.
Euronet will release first quarter 2010 earnings results prior to the market opening on Wednesday, April 28, 2010. As previously announced, Euronet will hold a conference call the same day at 9:00 a.m. Eastern Time to discuss those results.