Dubai: The DFM-listed Al Ansari Financial Services saw its H1-2024 net profit drop by 22 per cent to Dh205.4 million, which it attributed to the corporate tax effect. If the tax element was not factored in, it would have been by 14.2 per cent on the profit.
Operating income during the period came to Dh567 million, a 1.9 per cent drop. During the six months, the company saw a 2.2 per cent increase in overall transactions levels.
The remittance generated operating income was 6 per cent higher relative to the second-half of 2023, but showed a ‘modest’ year-on-year decline.
“This indicates a positive trajectory for the remittance business and a potential reduction in customers’ reliance on the parallel market,” said Mohammad Bitar, Deputy Group CEO.
“Our digital platforms continued to thrive, with transactions soaring by 24 per cent in the first-half of 2024.
“We successfully expanded our branch network to 259 locations by the end of the reporting period, while maintaining a strong operational efficiency, as evidenced by an EBITDA margin of nearly 45 per cent.”
The increase in digital transactions is telling. From April, UAE based exchange houses hiked their fees on remittances by 15 per cent – Dh2.5 – on transactions done through their physical outlets. At the time, industry sources had said this would prompt more adoption of digital options to send funds across borders by residents in the country.
"We are optimistic about the future, buoyed by the expanding remittance sector, ongoing fee adjustments, and a favourable macroeconomic outlook for the UAE, supported by government initiatives," said Bitar. "We remain steadfast in our growth strategy and committed to delivering increased value to our shareholders.”
At the end of June, the company had 259 money exchange outlets in the UAE.
Charting future growth
Al Ansari now has a clear roadmap for widening its non-UAE operations. Just recently, it signed a sales and purchase agreement to acquire Bahrain's BFC Group Holdings for $200 million, 'reflecting ambitions to expand its geographic presence and service portfolio achieving sustainable growth'. (The combined 2023 revenues of Al Ansari and BFC would have been Dh1.4 billion, which would have been a 22 per cent rise on the UAE entity's reported revenue.)
"With this acquisition, the group is poised to become the leading provider of foreign exchange and remittance services across the Gulf."
It will the have more than 410 branches spread across the UAE, Bahrain, Kuwait and India. These constitute a combined workforce of about 6,000 employees.
Another set of possibilities
The revenue mix would also be improved by the launch of Al Ansari Digital Wallet latest this year. Also, there is the integration of Al Ansari Exchange in Kuwait with Oman Exchange, expected to be complete by end of August this month. "Synergies are projected to be realised in Q1-2025," the company said.
