Network International posts 42% rise in 2022 net profit on revenue boost

The payments-processing company is expanding its presence in Saudi Arabia

Network expects to complete its $100 million share buyback programme this year. Photo: Network International

Network International, the UAE-based payments-processing company, reported a 42 per cent increase in last year's net profit on revenue growth backed by increased consumer spending.

Net profit for the 12 months to the end of December rose to $80.1 million from the previous year, it said in a filing to the London Stock Exchange, where its shares are traded.

Revenue during the year rose more than 24 per cent to $438.4 million led by a "stellar performance" in its merchant services business, which grew its revenue by more than 41 per cent annually driven by UAE consumer spending.

Adjusted earnings before interest, taxes, depreciation and amortisation (ebitda) rose more than 24 per cent to $178.6 million, "reflecting the company’s largely fixed cost base" while investing in new products and markets, it said.

“This is the result of our revitalised strategic approach which is creating a more agile and effective business, supported by strong economic growth across our markets and continued acceleration towards digital payments," said Nandan Mer, chief executive of Network International.

"We delivered several critical initiatives, including our market entry to Saudi Arabia, merchant payment services in Egypt and the launch of commercial payment services.

"We expanded our suite of value-added-services, providing a range of new solutions for merchants and financial institutions; and have doubled the group’s e-commerce revenues through the integration and growth of DPO Group."

Saudi Arabia and the UAE, the Arab world's largest economies, expanded at their fastest pace in more than a decade last year on the back of higher oil prices and government initiatives that boosted the recovery from the Covid-19 pandemic.

Network, which currently offers processing solutions in Saudi Arabia, said it has signed on four new financial institutions, bringing its total customer numbers to six, to support its medium to long-term revenue target for the kingdom of $50 million.

The company has also initiated the process to provide merchant payment services in Saudi Arabia and has received in-principle approval for a major payment institution category licence from the Saudi Central Bank.

"This will further expand the company’s revenue opportunity in Saudi Arabia," it said.

Network also launched direct-to-merchant payment services in Egypt in January, with a focus on the small and medium enterprise segment.

It is also seeking more opportunities in Africa, following its acquisition of African online payments platform DPO Group for $291.3 million in 2021.

"We remain excited about the growth potential in Africa and will soon deploy our best of breed technology platform on-soil in a number of countries, enhancing our competitive positioning and unlocking additional revenue pools," Mr Mer said.

The company also said its share buyback programme of $100 million is expected to be completed this year.

Looking ahead, Network "retains a positive outlook for the year" with its core markets rapidly transitioning towards digital payments at a pace significantly ahead of more developed economies, the company said.

It expects revenue growth in the high teens for this year in constant currency, with ebitda margins slightly ahead of 2022.