Network International, one of the top payment-processing companies in the Mena region, has reported jump in first-half net profit of more than 112 per cent on the back of higher revenue, as the company continues to grow its business in the region.
The Dubai-based company's net profit for the six months to the end of June rose to $32 million, compared with $15m during the same period last year, Network International said in a filing to the London Stock Exchange, where its shares are traded.
Revenue during the period rose 31 per cent to $205m from $156.3m in the same period last year. Middle East revenue climbed 21.5 per cent to $136.5m while revenue from African operations grew 56 per cent to $68.4m.
The company also posted a gain of $2.2m on the previously announced disposal of its subsidiary Mercury.
"We are encouraged by the continued progress of our growth strategy, with another strong trading period,” said Nandan Mer, chief executive of Network International.
“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 ... Saudi Arabia is progressing well, having recently secured a second new customer this year. We also see an opportunity to return excess cash to shareholders through a share buyback programme, while retaining our existing flexibility to take advantage of additional growth opportunities which may arise.”
Saudi Arabia and the UAE, the Arab world's two biggest economies, have recovered strongly from the effects of the coronavirus pandemic on the back of higher oil prices.
The kingdom is forecast to grow 7.7 per cent this year, while the UAE's economy will expand 4.2 per cent, according to the latest forecast by the International Monetary Fund.
Consumer spending in Saudi Arabia also rose by 13.4 per cent annually in June amid economic recovery in the country. Cash withdrawals, as well as point-of-sale transactions, climbed 1 per cent and 19 per cent, respectively, during the month, according to a report by Riyadh-based Jadwa Investment.
Mr Mer expects $50m in revenue from the kingdom in the next five years, from roughly $2m to $3m at present.
"The journey has started [in Saudi Arabia] and we expect our business to be stronger," he told The National.
"We had committed a minimum of $50m of net revenue in the next five years. It’s a large market and one of the exciting markets to do business and we are fully committed to it."
The company expects Saudi Arabia to "become our second largest market after UAE, to begin with, and over time grow from there and become a much bigger part of our business", said Rohit Malhotra, chief financial officer and group chief strategy officer at Network International.
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 company and pledged to invest a further $35m in the business over the next five years.
The company also announced its intention to commence a share buyback programme of up to $100m to enable "the company to return value to its shareholders, while also retaining sufficient capital and balance sheet flexibility to invest in other growth opportunities".
Network International expects revenue growth of 27 to 29 per cent for the full year as its markets continue "to see solid trading conditions".