Payment firm Network International bets on bullish Africa for growth.
Digital payments company Network International is betting on Africa for growth as the company seeks to unlock shareholder value.
The United Arab Emirates (UAE)-domiciled Network International released preliminary financial results for the year ended December, saying it is elevated by the growth potential in Africa.
Network International provides technology-enabled payments solutions to merchants and financial institutions in the Middle East and Africa. The company is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index.
In Africa, the company’s focus is on the SME segment, where it seeks to replicate its success in the UAE.
Network International is working with digital-only financial institution, TymeBank, and others in South Africa targeting small businesses. In January this year, it launched direct-to-merchant payment services in Egypt.
Yesterday, Network International reported ‘strong strategic progress’, delivering 24% revenue growth, and profit up over 40% year-on-year.
Network’s Merchant Services business significantly increased revenue to $183 million in 2022, up 41.4% compared to the previous year.
In Africa, its subsidiary, DPO Group’s proforma total payment volume increased 29.6% year-on-year in constant foreign exchange.
The group added that the growth in South Africa was impacted by macroeconomic conditions, while growth in markets outside of South Africa remains strong.
Looking ahead, Network International is upbeat about Africa, saying its core markets are rapidly transitioning towards digital payments at a pace significantly ahead of more developed economies.
“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,” said Nandan Mer, CEO, Network International.
Commenting on the overall performance for the year, Mer said: “We accelerated revenue growth to 24.5% year-on-year in 2022, having also achieved margin expansion while investing in new opportunities.
“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.
“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.”
In the current reporting period, the company reported total revenue of $438.4 million, up 24.5% compared to the previous year, led by stellar performance in its Merchant Solutions Services business, which grew its revenue by 41.4% year-on-year.
Consequently, the company said, underlying Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) increased to $178.6 million, supporting margin expansion of 240 basis points to 40.7%, reflecting the company’s largely fixed cost base.
Net profit for the year was $80.1 million, up 41.6% year-on-year driven by the company’s strong EBITDA performance.