Network International first-half revenue surges 31.1%

The UAE, the company’s largest market, saw high growth in merchant payments processed from domestic consumers at 20 per cent year on year, and payments from international visitors growing 92 per cent



Network’s pipeline of prospective clients continues to grow, instilling confidence in the company’s ability to attract new wins over the coming months. — File photo
Network’s pipeline of prospective clients continues to grow, instilling confidence in the company’s ability to attract new wins over the coming months. — File photo

By Staff Report

Published: Thu 11 Aug 2022, 6:39 PM

Last updated: Thu 11 Aug 2022, 6:40 PM

Network International Holdings on Thursday said its first-half revenue rose 31.1 per cent to $205 million compared to the same period last year, with broad-based improvement across all regions and a $15 million contribution from newly acquired DPO Group.

In a statement, the company said revenues in the Middle East and Africa increased 21.5 per cent and 55.8 per cent, respectively, during the January-June 2022. The UAE, the company’s largest market, saw high growth in merchant payments processed from domestic consumers at 20 per cent year on year, and payments from international visitors growing 92 per cent year on year.

Underlying EBITDA increased 26.2 per cent to $76.2 million in first half of 2022, compared to the same period last year, supporting a healthy margin of 37.2 per cent, up 190bps year on year. This reflects Network’s strong revenue performance and cost control, whilst it continued to invest in its product capabilities and future growth.

Profit for the period was $32 million, up 113 per cent year on year, driven by EBITDA growth, a $2.2 million gain on the previously announced disposal of its subsidiary Mercury, as well as a benefit from foreign exchange translation movements.

Given Network’s healthy balance sheet and strong cash generation capabilities, with $81 million generated in underlying free cashflow for the twelve months to the 30 June 2022, the company announced its intention to commence a share buyback programme of up to $100 million. The program enables the company to return value to its shareholders, whilst also retaining sufficient capital and balance sheet flexibility to invest in other growth opportunities.

Nandan Mer, chief executive officer, Network International Holdings, said: “We are encouraged by the continued progress of our growth strategy, with another strong trading period delivering 31 per cent year-on-year revenue growth. This is supported by the acceleration of digital payments growth across our markets, successful strategic execution and share gains in our home market of the UAE."

"Our market entry into the Kingdom of Saudi Arabia is also progressing well, having secured a second new customer this year. We also see an opportunity to return excess cash to shareholders through a share buyback programme, whilst retaining our existing flexibility to take advantage of additional growth opportunities which may arise," he said.

"Overall, our performance in the first half underpins our outlook and guidance for the year ahead, which is reconfirmed. Whilst we remain conscious of rising global macroeconomic and inflationary pressures, we continue to see steady trading in our major markets,” he added.

Network secured nine new customers in the period including Alain Finance PJSC, its first non-banking FI customer in the UAE.

It also continues to make strong inroads in the Kingdom of Saudi Arabia and signed two financial institutions for Issuer Solutions processing services during the first half, demonstrating the attractiveness of its offering in the kingdom.

Network’s pipeline of prospective clients continues to grow, instilling confidence in the company’s ability to attract new wins over the coming months. The kingdom, a dynamic payments market, represents a cUSD50 million revenue opportunity for Network in the medium-long term.

Direct-to-merchant services to launch in Egypt soon

Egypt is a long established and successful processing services market for Network, where it will soon be launching direct-to-merchant payment services, focusing on the SME market segment. The deployment of the technology stack is complete and the Company expects merchant payment services to go live in the second half of 2022. Egypt is an exciting growth opportunity for Network, with the revenue opportunity expected to build from 2023 onwards.

Outlook for FY 2022

Whilst Network is mindful of global macroeconomic challenges, its major markets continue to see solid trading conditions. Given the solid performance seen in the first half, financial guidance for the full year is reconfirmed, where we expect Group revenue growth of 27-29 per cent year on year, with modest EBITDA margin expansion.

— muzaffarrizvi@khaleejtimes.com


More news from Business