Al Ansari first-quarter net profit climbs on operating income boost

Rise underpinned by the robust momentum in the UAE economy

Al Ansari Financial Services' net profit for the three months to the end of March rose to Dh133 million. Satish Kumar / The National

Al Ansari Financial Services, the UAE money exchange and transfer company, reported a 5.6 per cent rise in first-quarter net income amid a surge in the number and value of transactions.

Net profit attributable to the shareholders of the company for the three months to the end of March rose to Dh133 million ($36.2 million) compared with Dh125.9 million in the same period last year, the company said in a statement to the Dubai Financial Market, where its shares are traded.

Quarterly operating income grew 9 per cent year on year to Dh287 million, driven by an 8.6 per cent annual increase in the total number of transactions to 11.7 million across all offerings.

“The increase in the number of transactions was driven by exceptional demand from the corporate business segment, underpinned by buoyant economic conditions,” the company said.

“It is also owed to a strong increase in the bank notes business on the back of the UAE’s tourism boom and increase in outbound tourism.”

Earnings before interest, taxes, depreciation and amortisation for the first three months of the year increased by 7.9 per cent on an annual basis to Dh151 million.

The company's ebitda — earnings before interest, taxes, depreciation and amortisation — margin for the reporting period reached 53 per cent on the back of strong top line growth, contribution from increased digital transactions and the group’s capital expenditure-light model.

The year is “off to a fantastic start, building on the previous year’s strong financial and business performance”, Rashed Al Ansari, group chief executive of Al Ansari Financial Services, said.

“Our integrated offering, multichannel approach, diverse and growing customer base and capex-light business model have supported our profitable growth over the last three months,” he said.

The quarterly income was also underpinned by a robust UAE economy, “specifically the increase in number of inbound tourists, positive consumer confidence and increase in business activities”, he added.

Al Ansari made its trading debut on the DFM in April after it sold 750 million shares through its initial public offering that raised $210 million from the sale of a 10 per cent stake to retail and qualified institutional investors.

The company drew $3.45 billion in bids for the offering, which was oversubscribed 22 times on average.

National Bonds Corporation — owned by the Investment Corporation of Dubai, the investment arm of the Dubai government — committed to a cornerstone investment worth Dh200 million in the IPO.

“Our latest financial performance demonstrates why we are a compelling investment opportunity, supports our promise to distribute dividends and validates investors’ strong demand in our IPO,” Mr Al Ansari said on Thursday.

The company expects to distribute a minimum dividend of Dh600 million for the 2023 financial year, implying a minimum dividend yield of 7.77 per cent to 8 per cent.

The first-half dividend payment will be made in October and the second-half payment in April next year.

The company, which has increased its branch network in the UAE to 232 at the end of the first quarter, up from 217 in the same period in 2022, said it has managed to curtail expenditure despite an increasing operating cost environment.

Free cash flow at the end of March increased 3 per cent on an annual basis to Dh141 million.

Looking ahead, the company plans to continue to pursue its “well-funded” growth strategy to unlock shareholder value over the mid to long term.

“We expect to further strengthen our market leadership position in our home market within the remittance and banknotes market by increasing our physical branches,” Mr Al Ansari said.

“We also expect to expand our footprint in other high-potential GCC markets, supporting our revenue diversification.”