Dubai: Dubai’s Al Ansari Financial Services, which had its IPO earlier this year, had a profit drop in the year-to-date, totaling Dh387.8 million against the 2022 total of Dh434 million. On the top-line, revenue from continuing operations fetched Dh883.1 million compared to Dh856.5 million.
The DFM-listed entity – the UAE’s biggest name in the remittance space - is working to expand its network presence in key Gulf markets outside of the UAE. It recently revealed plans to take a majority stake in an Omani entity. Al Ansari already has operations in Kuwait.
Al Ansari said it is still awaiting regulator approval to raise fees on its remittance services. Other currency exchange houses have also been echoing the sentiment.
We take great pride in outperforming the market across all our products and offerings, as well as in our unwavering commitment to achieving our growth targets...
The stock is up 10 per cent since its listing and will start today at Dh1.14. Earlier this month, the company announced an interim dividend for H1-23, at Dh0.04 a share and a total payout of Dh300 million.
'Adjust in near future'
"We maintain our dedication to further our geographic expansion and the augmentation of our digital capabilities and offerings," said Rashed A. Al Ansari, Group CEO of Al Ansari Financial Services. "We take great pride in outperforming the market across all our products and offerings, as well as in our unwavering commitment to achieving our growth targets, while acknowledging a 5 per cent drop in the operating income from the remittance business that is expected to be adjusted in the near future."
- Al Ansari Financial Services' statement
Reasons for profit drop
The company cites a 'temporary drop in outward personal remittances' to major receiving countries as contributing to the profit drop. There was also an increase in overheads and expenses that were 'not offset by the planned fee increase', and which is 'still pending regulatory approvals'.
The competition in the UAE remittance space continues to be nothing short of intense, with fintechs now getting quite active and taking on the dominance of the legacy currency exchange houses and, more recently, that of banks. Remittance volumes out of the UAE continue to grow in strong double-digit terms, and the industry has been a key beneficiary from the growth in the country's new resident numbers.
"There is still plenty of growth chances left in the UAE remittance business, but Al Ansari can help itself by speeding up non-UAE expansion," said a market analyst. "Despite the high competition, remittance fees in the UAE have held up well, and Al Ansari has been able to grow its overall market share."