Network International (NETW) expects revenue to drop by as much as a fifth in 2020, as client transactions continued to fall in the first half. The payments services provider has been hit by the decline in international spend following global lockdowns, although it expects a gradual recovery in domestic spend in the Middle East during the second half.
The group also noted that the World Health Organisation has indicated that coronavirus still has not peaked in Africa. Management therefore anticipates further pressure on card issuance and transaction volumes in its operations on the continent.
The company expects to report total revenues of $133-134m (£106.6-107.4m) for the first half, where revenues in the first quarter were broadly flat, followed by a sharp 23 per cent drop-off in the second.
Management assumes a gradual recovery of its essential domestic consumer spend in the United Arab Emirates and Jordan, moving closer to prior year levels by the end of 2020. It does not expect international or tourism spending to begin to return until the final quarter, and initially at a level significantly below the same level in 2019.
The group still intends to restart its progress on its entry into the Saudi Arabian market, which requires a total capital investment of $25m that could take up to two years.
