Network International, in which Emirates NBD now holds a 25% stake following its Initial Public Offering, has posted a double-digit increase in revenue despite a fall in profit from continued operations because of the one time cost resulting from the primary offering. The company’s revenues in the first half of 2019 amounted to $152m through to the end of June in comparison to the $135m that was generated in the same time period in 2018. Profit from continued operations declined by as much as 55% to Dh15m.
Africa was responsible for the increase in revenue, with a rise of 21.6% following significant volume growth within the number of hosted cards, as well as the increased cross-sell throughout the customer base. Customer momentum is staying strong, according to the company, with a number of customers signing new contracts, including the likes of Emirates Islamic and Emirates NBD, plus new financial institutions and direct acquiring customers signing contracts in countries such as Saudi Arabia.
Network International’s Chief Financial Officer Rohit Malhotra said that the rest of 2019 should put the company in an ideal position to deliver on the shared guidance from the listing time and is anticipating the delivery of a growth in low double-digit constant currency organic revenue even as it maintains a stable underlying EBITDA margin.
He added that the company expects its performance to accelerate between low to mid-teen growth in organic constant currency revenue together with more moderate operating leverage in the medium to long term, and that Network International is also pursuing a number of growth accelerators that are likely to result in incremental upside later on.
Malhotra added that the capex is likely to be approximately 22% of revenue in 2019 and that after the transformation has been completed, it is expected to be sitting at 8%. There should be a material reduction in capex as a revenue percentage over the course of the next few years.
Network International experienced a robust listing on the London bourse, with the company also witnessing an appreciation of its market cap to as much as £2.975bn in comparison to the £2.18bn valuation that was made at the time of the listing. Shares in the company were also up by 0.67%, reaching 599 pence per share, increasing by as much as 26% since it made its debut on 10 April this year.
Unlike the United Arab Emirates, Saudi Arabia will be Network International’s second-largest market following investments, with that position currently being held by Jordan. Saudi Arabia is not a credit market but is a heavy debit market, unlike the UAE. A new bank within the UAE has also signed on as a new customer, as have a number of others within the Mena region, Network International’s Chief Executive Officer Simon Haslam has revealed.