Network International swings to full-year loss as revenue drops amid Covid-19 pandemic

The company is on track to acquire African payments firm DPO Group in the second quarter

Netowrk International expect 2021 total revenues to return approximately to those recorded in 2019. Image courtesy of Network International

Network International, one of the top payment processing firms in the Middle East and North Africa, said its 2020 full-year profit fell 90 per cent after revenue dropped amid the Covid-19 pandemic-induced economic slowdown.

The Dubai-based company's net profit for the period ending December 31 fell to $5.59 million, Network International said in a statement to the London Stock Exchange, where its shares trade. Revenue during the period declined 15 per cent to $284.8m.

“While trading and revenue was naturally subdued during the year, we started to see a number of positive indicators as we exited 2020, including the progressive recovery of volumes and transactions and a pickup in the pace of new business,” Nandan Mer, chief executive of Network International, said on Monday.

“The pandemic has also accelerated the move away from cash towards card and other forms of digital payments, which will help to drive our growth.”

Network International is a payment processing business that 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.

It has operations in the Middle East and Africa. In 2020, Middle East revenue dropped 19 per cent to $198.2m, while Africa revenue declined 11.6 per cent to $80m, the company said.

The payment processor is also on track to acquire African payments firm DPO Group in the second quarter, it added.

“The acquisition will further consolidate our presence in Africa, strengthening our position across the entire payments value chain and accelerating our growth.”

DPO is the largest online commerce payments platform in Africa, offering online and mobile money payment services to over 59,000 active merchants across 19 countries.

The company is also pursuing plans to enter the Saudi Arabian market and allocated $20m in capital expenditure for its push into the Arab world's largest economy.

“We are encouraged by the positive momentum we saw at the latter end of 2020 and the accelerating secular trends that will support our business, which gives us confidence in the long-term outlook,” the company said.

However, it has “seen some headwinds to trading during the initial months of 2021, linked to the rise in Covid-19 cases across the UAE and some restrictive measures that have been introduced”.

“While the fluidity of the pandemic creates some uncertainty, we expect 2021 total revenues to return approximately to those recorded in 2019.”