UAE-based digital payments firm Network International Holdings said on Monday that its proposed acquisition of African-based DPO Group for $288 million remains on track.
Technology-enabled payments enabler DPO is the largest online commerce platform operating at scale across the African continent with a presence in 19 countries.
While saying the deal has yet to be completed, Simon Haslam, CEO of Network International, said: “I am encouraged to see their strong trading momentum through the quarter. This demonstrates the high growth nature of online payments across Africa, as well as DPO’s scale and market strength. We are excited by the opportunities they will bring to our group. Long term, our market and business fundamentals remain strong.”
His comments come as the company released new figures indicating improved trading performance through the third quarter of 2020 with total revenue down 17 percent compared to Q2.
Haslam said Network’s balance sheet and liquidity remains strong, with a total liquidity position of $300 million.
For the remainder of 2020, he said he expects the company to deliver a further 17 percent drop in revenue year on year.
“With improved trading momentum, we have seen a pick-up in some revenue streams that are initially at a lower margin, but drive revenue delivery over the medium term. We therefore expect underlying net income in line with current market expectations,” he added.
Simon Haslam, CEO of Network International
Haslam said: “We are very pleased to see the continuation of more positive trading momentum through the third quarter, which reflects the easing of Covid-19 restrictions across our regions and improving consumer spending.
“This has been supported by the transition from cash to digital payments, where recent indicators point to an acceleration in this trend, which will benefit the size of the digital payments market and long-term growth potential.
“Whilst trends are improving, we continue to monitor the outlook and ongoing impact from Covid-19. A number of our bank customers are feeling financial pressure, particularly in Africa, which is creating some short-term delay to business activities.”
Network International won a number of new direct acquiring merchant customers, including Zomato, Western Union and Luxury Fashion Group
He added that year-on-year total revenue growth in the fourth quarter will be below that of the third quarter as Q3 saw higher staycation spending from UAE residents, and the release of pent up consumer demand in retail.
The fourth quarter is seasonally the highest comparable period of the year and largest quarter from a revenue perspective, where this year underlying trends will be different as a result of Covid-19, he noted.
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