Al Ansari Exchange also contributed 74% of UAE based exchange houses’ consolidated net profit for the same period. Image Credit: Gulf News Archive

Dubai: The DFM-listed Al Ansari Financial Services reported a 5 per cent year-on-year upswing in operating income for H1-2023, attributed to strong demand for its diverse product range, notably bolstered by services extended to corporate clientele.

The group's operating income reached Dh578 million, signifying a 5 per cent year-on-year growth, propelled by a 10.7 per cent year-on-year surge in total transaction volume. The surge in transaction numbers was steered by robust demand from the corporate business segment.

Additionally, a substantial rise in the Bank Notes business, encompassing multi-currency prepaid cards, was observed due to heightened tourism activity and the peak holiday season. However, a slight dip in remittance transactions somewhat offset these gains, Al Ansari said on Thursday in a filing to the Dubai Financial Market where its shares are traded.

Given our robust financial position and our confidence in further unlocking shareholder value as we boldly execute our growth agenda, the Board is confirming the distribution of the promised minimum Dh600 million in cash dividends to our shareholders.

- Rashed A. Al Ansari, Group CEO of Al Ansari Financial Services

H1-2023 EBITDA remained stable at Dh299 million in comparison to H1-2022, despite an increase in operational costs. The rise in costs is directly linked to the establishment of 15 new branches since H1-2022. Furthermore, the industry-wide inflationary pressures have contributed to the uptick in expenses within the exchange sector across the UAE.

The net profit for the period amounted to Dh263 million, marking a 2.5 per cent drop compared to H1-2022. This decline was attributed to diminished remittance margins, heightened operational costs, and augmentation in financing expenses due to interest payments on a loan obtained in December 2022.

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“Subject to regulatory approvals and other completion related processes, we are poised to enter the Oman market, our second foray outside UAE, following Kuwait, by acquiring a controlling stake in one of the leading exchanges in the Sultanate,” said Rashed A. Al Ansari, Group CEO of Al Ansari Financial Services. “We are also investing in our digital channels to ensure we maintain a competitive edge while also optimising costs to serve customers.”

The Group allocated a 62 per cent year-on-year increase in CAPEX, reaching Dh20 million, as part of its concerted efforts to amplify business operations in alignment with its expansion strategy. The Group maintained a robust free cash flow (FCF) of Dh278 million, supported by effective cash conversion practices.

“The Bank Notes business performed exceptionally on the back of the strong demand from inbound tourists, high footfall in prime locations, including malls, as well as an increase in the number of people travelling abroad,” said Mohammad Bitar, Deputy Group CEO of Al Ansari Financial Service. “Our effort to grow our B2B business is paying off. The value of transactions surpassed Dh54 billion driven by strong demand from corporate customers for remittances, WPS, bills collection.”