Network International posts ‘ahead of guidance revenue’ of $284m
Digital transactions platform Network International Holdings said on Thursday that its 2020 revenues of $284 million was ahead of guidance.
In a statement, the company said its underlying EBITDA (earnings before interest, taxes, depreciation, and amortization) was also expected to be slightly ahead of forecast while its balance sheet remained strong, with the company “comfortably inside” financial covenants.
Simon Haslam, chief executive officer of Network International, said the company continued to see encouraging market trends throughout the final quarter and exited the year with positive momentum across all of its business lines.
“In our core market of the UAE, domestic direct acquiring total processed volume has fully recovered to 2019 levels, supported by strong e-commerce spending, while international volumes also benefited from a pick-up in tourism over the holiday period,” said Haslam.
Revenue in the fourth quarter was down 19 per cent year-on-year, although absolute revenues in the final quarter were higher than the third quarter, reflecting the continuing recovery in card and digital transactions across its markets, and “particularly encouraging” trading in December.
Fourth quarter merchant solutions revenue was down 31 per cent year-on-year, with the division exiting 2020 with domestic total processed volume equal to the prior year. The company said its total liquidity position was $325 million, comprising $190 million in undrawn lending facilities and a cash balance of $135 million, excluding the funds raised for the acquisition of DPO Group, Africa’s leading online commerce platform, for $288 million.
“DPO remains one of our key future growth accelerators,” Haslam said, adding that the long-term structural trends toward digital payment acceptance continued apace, with an acceleration across the Middle East and Africa region. “Looking ahead, while we remain cautious around the development of the pandemic, there are signs of improving consumer spending, underpinning our confidence in our ability to take advantage of the exciting opportunities on offer in the world’s most underpenetrated markets.”
The company reported “strong” total processed volume growth from online merchants of 68 per cent year-on-year, excluding government and airline online total processed volume, within a directly-acquired volume decline of 18 per cent over the prior year. The company reported a 3.0 per cent year-on-year decline in direct total processed domestic volumes but expects a full recovery to 2019 levels as it exited the year.
In the Middle East, the company secured several new merchant wins alongside customer contract renewals. “Most notably, we renewed a significant contract with Abu Dhabi Commercial Bank to provide fully outsourced Merchant Solutions, with acquirer processing and value added services, reflecting our longstanding relationship with another leading regional financial institution. We have also signed new merchants and partnership arrangements with several global brands in the online acquiring space,” Network said.
The company said it continued to see a shift in consumer behaviour towards digital payments. “This shift is supported by trends in the card data we host on behalf of bank customers.”
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