Network International swings to profit in first half on higher revenue

Dubai-based payment processing company plans to enter Saudi Arabia next year in Mena growth push, its chief executive says

Network International's Dubai HQ. The company's net profit in the first half of 2021 rose to $15 million. Courtesy Network International

Network International, one of the top payment processing firms in the Middle East and North Africa, returned to profit in the first half of 2021 on the back of higher revenue, as global economies continued to recover from the coronavirus pandemic.

The Dubai-based company's net profit for the six-month period ended June 30 rose to $15 million compared with a loss of $936,000 during the same period last year, Network International said in a statement to the London Stock Exchange, where its shares are traded.

Revenue during the period rose 16.5 per cent to $156.3m.

“We are seeing a recovery from Covid-19, with the majority of KPIs now ahead of pre-pandemic levels, including the signing of new merchant and bank customers,” Nandan Mer, chief executive of Network International, said.

“We are particularly focused on accelerating growth in our merchant solutions business, which will be supported by a rejuvenated strategic approach and expanded capabilities.”

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 company expects total revenue in 2021 to be slightly higher than 2019 as economies continue to recover from the pandemic.

“The incremental revenue will be used to support the future growth of the business, with investment focused on strengthening its market position in the merchant-acquiring business and, in particular, the SME [small and medium enterprise] and e-commerce growth strategies,” the company said.

In a push to expand its reach in the Mena region, Network International is pursuing plans to enter Saudi Arabia. The company plans to start operations in the Arab world’s largest economy in the first quarter of next year, with a total capital investment of $10m, as digital and contactless forms of payment pick up in the kingdom in the wake of the coronavirus pandemic.

Network International expects to see revenues building up to $50m over a five-year period in Saudi Arabia, according to Mr Mer.

“I am excited about the progress we have made in entering the Kingdom of Saudi Arabia. While borders were closed during the height of the pandemic, we used our time productively and have re-assessed the approach, with much lower capital investment and a faster go-to-market plan," he said.

Elsewhere, the company is on track to acquire African payments firm DPO Group in the third quarter of this year and will continue to look for new opportunities to boost growth, Mr Mer told The National.

“We are equally mindful of opportunities to grow from [a] buy, build and grow perspective,” he said of the acquisition plans.

“We are a growth company and we want to accelerate our growth," he added. "We’ve got a good jump-off point this first half. We are confident that this momentum will continue for the rest of this year, which will provide us a solid jump-off point looking into 2022 and beyond.”