Network International expects full-year revenue to fall by 15%

Network International, one of the top payment processing com panies in the Mena region, said revenue continued to grow in the third quarter of 2020 but cautioned that the full-year figure would fall by 15 per cent.

The company suffered a decli ne in the first half of the year as fewer physical card paymen ts were made by people amid movement restrictions put in place to halt the spread of the pandemic.

However, a stronger second half meant its full-year sales of $284 million exceeded its guidance.

“We continued to see encouraging market trends throughout the final quarter and are pleased to report that we exited the year with positive momentum across all of our business lines,” chief executive Simon Haslam said.

“In our core market of the UAE, domestic direct acquiring TPV [total processed volume] has fully recovered to 2019 levels, supported by strong e-commerce spending, while international volumes also benefitted from a pickup in tourism over the holiday period.”

Digital and contactless forms of payment have surged globally amid the Covid-19 pandemic, which has spurred the growth of e-commerce in the Mena region. For the fourth quarter, total revenue was 19 per cent lower compared with the same period in the previous year but higher in absolute terms than in the third quarter.

This reflected the “continuing recovery in card and digital tra nsactions across our markets, and particularly encouraging trading in December”, the company said in a filing to the London Stock Exchange, where its shares trade.

Its full-year financial results will be announced on March 8.

Network International raised $1.4 billion through its listing on the London Stock Exchange in 2019. MasterCard took a 10 per cent stake and subsequently pledged to invest a further $35m in the business over the next five years.

“Th e long-term structural trends towards digital payment acc eptance continue apace, with an acceleration across the MEA [Middle East and Africa] region,” said Mr Haslam.

“Lo oking ahead, while we rem ain cautious around the development of the pandemic, there are signs of improving con sumer spending, underpinning our confidence in our ability to take advantage of the exciting opportunities on offer in the world’s most underpenetrated markets.”

Network International’s balance sheet and liquidity at the end of the fourth quarter remai ned strong, with $190m in undrawn credit lines and a cash balance of $135m, the company said.

Earlier this month, it appointed Nandan Mer as chief executive, effective from February 1. He will replace Mr Haslam, who will retire after four decades in the sector.

Network International is also on track to acquire African paymen ts company DPO Group and the transaction is expected to be finalised in the first quarter.

Network International said strong e-commerce spending buoyed its revenue in the fourth quarter of last year