Network International (Network), the leading enabler of digital commerce across Africa and the Middle East, has announced its preliminary financial results for the year ended 31 December 2022.
The company reported total revenue of USD 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, underlying Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) increased to USD 178.6 million, supporting margin expansion of 240bps to 40.7%, reflecting the company’s largely fixed cost base. Net profit for the year was USD 80.1 million, up 41.6% year on year driven by the company’s robust EBITDA performance.
Network also launched direct-to-merchant payment services in Egypt in January 2023, adding to its thriving Acquirer and Issuer Processing business which serves over 20 FIs. The company’s focus is on the SME segment, where it seeks to replicate its success in the UAE.
The company’s share buyback programme of USD 100 million is expected to complete during 2023. USD 40.6 million was repurchased during 2022, and USD c13 million to year-to-date, with a further USD c47 million to complete.
We accelerated revenue growth to 24.5% y/y in 2022, having also achieved margin expansion whilst 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. 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.
Cash generation was strong, which has supported shareholder returns through the launch of a USD 100 million share buyback programme, whilst retaining our flexibility to take advantage of additional growth or acquisition opportunities.
We thank our colleagues and customers for their support and delivery of such a strong outcome. The year ahead holds many growth opportunities, supported by our scale, capabilities, people and trusted brand.
Nandan Mer, Chief Executive Officer, Network International
Network’s Merchant Services business significantly increased revenue to USD 183 million in 2022, up 41.4% compared to the previous year.
Africa (DPO Group) proforma TPV increased 29.6% y/y in constant FX. Whilst growth in South Africa was impacted by macroeconomic conditions, growth in markets outside of South Africa remains strong.
Network’s strategic focus areas deliver rapid growth with Online TPV and SME TPV substantially increasing by 39% and 41%, respectively, as Network signed a record number of new merchants, primarily driven by the SME sector. This significant achievement was supported by the launch of digital onboarding, low-cost mobile phone app payment acceptance and the web-store builder associated with its ‘DPO Pay’ package. The company also continues to attract new large merchants, securing Anantara, Taj Tower Hotel Group, Talabat, Audemars Piguet, and Western Union, amongst others.
Network’s Outsourced Payment Services revenue increased 13.3% year on year to USD 243 million in 2022, supported by the addition of 18 new financial institution (FI) clients, with the rollout of new APIs supporting the automation of customer onboarding. The company also renewed six notable existing contracts and expanded portfolios with customers through successful cross-selling. Consequently, transaction volumes increased by 32.1% year on year and credentials managed increased by 8.4%.
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 expects revenue growth in the high teens for 2023 in constant currency, with EBITDA margins slightly ahead of 2022.
