Al Ansari Financial Services sees profit drop for 9-month 2024 over 'significant challenges'
DFM-listed points to industry-wide challenges as well as corporate tax
Dubai: Net profit for DFM-listed Al Ansari Financial Services dropped to Dh308.53 million for the first nine months from Dh387.8 million. The company’s currency exchange operations has the highest market share in the UAE and, recently, it has also been making headway to expand its base in the GCC markets.
On the top-line, the 9-month numbers were flat, at Dh882.75 million against Dh883.18 million a year ago. (The total number of transactions during the first nine months was higher by 2% to 37.3 million.)
“The past nine months have posed significant challenges for our industry, with economic and geopolitical pressures, heightened competition, and introduction of corporate tax, coupled with increased operational and manpower costs, impacting our performance,” said Rashed Al Ansari, Group CEO of Al Ansari Financial Services.
Less pressure from hawala operators
The company is seeing less of the 'challenges posed by the parallel market' when it comes to key remittance destinations from the UAE. "However, ongoing geopolitical tensions in the region continue to impact remittance income," said a statement. This meant the remittance operating income saw a 2% decline year-on-year on a reported basis.
Need for 'fair practices'
"While we welcome competition and believe it fosters innovation, it is important to ensure fair and sustainable practices," the CEO added. "This is why we are actively working with the Foreign Exchange and Remittance Group (FERG) and regulatory authorities to address industry-wide challenges and mitigate their impact on our business and the broader industry."
Fintech platforms, leading tech groups such as e& and du, as well as banks operating in the country have a fairly sizeable role in the UAE's remittance and allied services. Legacy remittance exchange houses have seen market share erosion as well as pressure on their margins. (Recently, the UAE money exchange companies raised the fees on remittances done at their branch locations.)
"We are actively implementing strategies to further enhance efficiency and control expenditure that are expected to positively impact our bottom-line," said Mohammad Bitar, Deputy Group CEO of Al Ansari Financial Services.
More transactions on digital
On the plus side, Al Ansari has been making gains on transactions done through digital channels, which 'continue to be a primary focus'. It saw a 24% year-on-year increase in transactions through its digital platforms and 'now accounting for 23% of overall outward remittances'.