Network International, one of the top payment processing firms in the Middle East and North Africa, said revenue continued to pick up in the fourth quarter, but it still expects full-year revenue to fall 15 per cent.
The company suffered a decline in the first half of the year as fewer physical card payments were made by people during movement restrictions put in place to halt the spread of the pandemic, but a stronger second half meant its full-year sales of $284 million were ahead of 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,” Simon Haslam, chief executive of Network International, 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 pick-up in tourism over the holiday period.”
Digital and contactless forms of payment have surged globally in the wake of the Covid-19 pandemic. The health crisis has spurred the growth of e-commerce and digital payments in the Middle East and North Africa as more consumers now opt to shop online.
For the fourth quarter, total revenue was 19 per cent lower year-on-year but in absolute terms was higher than in the third quarter, reflecting the "continuing recovery in card and digital transactions across our markets, and particularly encouraging trading in December", the company said in a statement 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 in the firm and subsequently pledged to invest a further $35m in the business over the next five years.
“The long-term structural trends toward digital payment acceptance continue apace, with an acceleration across the MEA [Middle East and Africa] region,” Mr Haslam said. “Looking ahead, whilst 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.”
Network International's balance sheet and liquidity at the end of the fourth quarter remained strong with $190m in undrawn lending facilities and a cash balance of $135m, the company said.
Earlier this month, Network International appointed Nandan Mer as its new chief executive starting from February 1. He will be replacing Mr Haslam, who will retire after four decades in the financial services sector.
The payment processor is also on track to acquire the African payments firm DPO Group and the transaction is expected to be finalised in the first quarter. The company is also entering new markets, including Sudan.
The company said it continues 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 our bank customers," the company said.
For instance, it said customers who used their cards almost exclusively at ATMs at the beginning of last year now use them for less than half of transactions, with the rest taking place either at POS terminals or online.