H1 and Q2 2023
Financial Results
10 A ugust 2023
2023
H1 / Q2
H1 / Q2 2023 RESULTS PRESS RELEASE 1Al Ansari Financial Services Reports 5% Increase in Operating
Income to AED 578 Million in H1 2023 as it Makes Significant
Progress on Growth Strategy
KEY H1 2023 HIGHLIGHTS
ROBUST GROWTH IN OPERATING INCOME Operating Income
- Operating Income rose 5% year on year (YoY) to AED 578 AED 578 million
million driven by a 10.7% YoY increase in total transactions 5% YoY
across the Group’s offerings.
EBITDA HOLDS STEADY DESPITE INCREASED OPERATING
EBITDA
COST
AED 299 million
- EBITDA came in at AED 299 million, little changed from a year
ago despite a rising operating cost environment.
BANK NOTES AND WPS ARE TOP PERFORMERS
- Strong growth in Bank Notes business driven by the tourism Corporate
boom and peak travel period. Business
- Wage Protection System (WPS) supported by strong growth in 33.9% YoY
the number of wage disbursals on the back of strong customer
retention and acquisition.
CORPORATE BUSINESS CONTINUES TO GROW, IN LINE WITH Digital Channels
EXPECTATIONS 31% YoY
- 33.9% YoY surge in the value of transactions to corporate
customers, in line with Group’s efforts to boost offering to an
underserved but promising segment.
No of Transactions
24.4 million
DIGITAL CHANNELS ARE GAINING IN POPULARITY
- 31% YoY growth in number of transactions conducted across 10.7% YoY
Group’s digital channels, supporting efforts to enhance
customer journey and lower costs to serve.
Branches
PLANNING TO EXPAND INTO OMAN THROUGH THE +15
ACQUISITION OF ONE OF THE LEADING EXCHANGES since H1 2022
- Group secures approval to acquire controlling stake in leading
exchange company in Oman, in line with strategy to expand in
GCC region.
EXCHANGE UNIT PROGRESSING NICELY WITH NETWORK
EXPANSION PLANS
- 15 new Al Ansari Exchange branches opened across the UAE
since H1 2022, in line with Group’s ambitions to further cement
its domestic leadership position.
REAFFIRMING COMMITMENT TO DIVIDEND IN OCTOBER 2023
- Board reaffirms commitment to distributing a minimum of AED
600 million to shareholders, with the first interim payment
expected in October 2023.
H1 / Q2 2023 RESULTS PRESS RELEASE 2Dubai, UAE - 10 August 2023 - Al Ansari Financial Services PJSC (DFM: ALANSARI), (the
“Group”), one of the leading integrated financial services groups in the UAE and the parent of
Al Ansari Exchange, today announced its financial results for the fiscal first half (“H1”) and
second quarter (“Q2”) 2023, ended 30 June 2023. Operating income for the Group increased
by 5% year on year (YoY) in H1 2023, on robust demand across all products with significant
contribution from offerings and services to corporate customers.
Financial Highlights
In AED H1 2023 H1 2022 % change Q2 2023 Q2 2022 % change
thousands (YoY) (YoY)
(unless
otherwise
stated)
Operating
578,026 550,761 5.0% 291,004 287,645 1.2%
Income
EBITDA 298,620 300,932 (0.8)% 147,238 160,598 (8.3)%
EBITDA
51.66% 54.64% (2.9)% 50.60% 55.83% (5.2)%
Margin (%)
Net Profit 263,293 269,969 (2.5)% 130,284 145,856 (10.7)%
Earnings
0.0351 0.0360 (2.5)% 0.0174 0.0195 (10.7)%
per Share
Free Cash
278,130 287,917 (3.4)% 137,415 151,238 (9.14)%
Flow(FCF)
H1 2023 Operational Highlights
H1 2023 H1 2022 Change (unit)
No. of physical branches in UAE 238 223 Net 15 new
branches
Total No. of transactions 24.4 mn 22.0 mn 10.7% YoY
Corporate business - value of AED 54.3 bn AED 40.5 bn 33.9% YoY
transactions
Digital Channels - No. of 1.9 mn 1.4 mn 31%
transactions
H1 2023 Financial Performance Commentary
• H1 2023 Operating Income increased 5.0% YoY to AED 578 million driven by a 10.7%
YoY increase in the total number of transactions. This marks the highest six-month period
operating income to date.
• The increase in the number of transactions was predominantly driven by very strong
demand from the Corporate business segment underpinned by expansionary economic
conditions in the UAE. It was also owed to a strong increase in the Bank Notes business
including multi-currency Prepaid Cards on the back of the tourism boom and the peak
holiday season. These increases were partly offset by a marginal reduction in the number
of Remittance transactions.
H1 / Q2 2023 RESULTS PRESS RELEASE 3• H1 2023 EBITDA held steady at AED 299 million compared to H1 2022 despite an
increase in costs.
o Increase in costs during the period is directly related to the opening of 15
new branches since H1 2022, in line with Group’s organic expansion plans.
o Costs have also increased as a result of the rising cost environment, a factor
impacting the exchange industry across the UAE.
• H1 2023 Net profit was AED 263 million, registering a 2.5% decline compared to H1 2022.
The drop in net profit was predominantly driven by lowering remittance margins, higher
costs as well as an increase in financing costs related to interest paid on a loan drawn in
December 2022.
• CAPEX increased by 62% YoY to AED 20 million as the Group continues to invest in
scaling its business, in line with its growth strategy.
• The Group sustained a healthy FCF of AED 278 million, supported by strong cash
conversion.
Q2 2023 Financial Performance Commentary
• Q2 2023 Operating Income increased 1.2% YoY to AED 291 million mainly attributed to
strong growth in the Bank Notes, WPS and Other services, while we saw a slight decline
in the income from Remittance business.
• Q2 2023 EBITDA income declined 8.3% to AED 147 million, on the back of higher
operating costs, driven predominantly by Group’s network expansion as well as generally
rising costs, an industry-wide phenomenon and lower margin on the Remittance business.
• Net profit for the three-month period declined 10.7% to AED 130 million, on the back of
higher depreciation charge as a result of an expansion in the branch network and
increasing finance costs due to interest payment on an AED 300 million term loan drawn
in December 2022.
Performance of other offerings
• Worldwide Cash Express, the Group’s money transfer operator, saw a strong 32% YoY
growth in the number of transactions in H1 2023, a reflection of the strong demand for this
service from corporate customers.
• The Wage Protection Services (WPS) business saw a strong increase in Operating
Income, up 18.5% in H1 2023 versus H1 2022. This is predominantly driven by growth in
the number of newly acquired corporate customers and the increase in the number of
wage disbursals.
• CashTrans, the Group’s end-to-end cash management solution, is gaining remarkable
momentum, with the number of trips increasing by 32.4% YoY. The Group expects the
growth momentum to continue as it ramps up operating and sales efforts within this
product line and as its state-of-the-art cash center in Dubai commences operations in Q3
2023.
Dividend
• Given the Group’s strong financial and liquidity position, the Board reaffirms its
commitment to distributing a minimum amount of AED 600 million as announced during
H1 / Q2 2023 RESULTS PRESS RELEASE 4rl
the IPO, and outlined in the Prospectus, for FY 2023 to be paid out semi-annually with the
first half expected to be distributed in October 2023 and the second payment to be
disbursed in April 2024.
Commenting on the results Rashed A. Al Ansari, Group CEO of Al
I
Ansari Financial Services, said: “Our focus since the start of the year has
been on executing our growth strategy while continuing to produce robust
L
financial results. I am pleased to say that we have delivered on both fronts.
As the UAE economy continues to grow at a very healthy pace, our diverse
offerings served us well, with strong demand from different customer
segments, notably SMEs, and inbound and outbound tourism. This has
contributed to sustained top-line growth. Moreover, thanks to our leading market position, the
quality of our services and value-added products, the efforts of our teams, and our well-
recognised brand, we grew and further diversified our customer base during the period. Our
efforts to diversify the sources of revenue are contributing towards further enhancing the
resilience of our business model.
We are firing on all cylinders across our businesses. We are investing in our domestic expansion
while also expanding our footprint in other promising GCC markets. 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. We are also investing in further scaling our end-to-end cash
management business, CashTrans, which has so far performed tremendously, and is showing
promising growth potential as we invest in ramping up operations. We are also investing in our
digital channels to ensure we maintain a competitive edge while also optimising costs to serve
customers.
We are well funded for our growth plans, have ample liquidity and a very comfortable leverage
position. 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 AED 600 million in cash dividends to our shareholders.”
Mohammad Bitar, Deputy Group CEO of Al Ansari Financial Service,
said: “It has been a very busy and exciting period. We are seeing strong
demand for our relatively new offerings, while we continue to sustain our
market leadership position in our core offerings, Remittances and Bank
Notes.
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. We are very pleased with the exceptionally
strong performance of the Travel Card product, a testament to our success in launching and
continuously enhancing our products to satisfy customer needs. WPS has also delivered a
strong performance, driven by an increase in the number of customers as well as wage
disbursals.
Our effort to grow our B2B business is paying off. The value of transactions surpassed AED 54
billion driven by strong demand from corporate customers for remittances, WPS, bills collection,
H1 / Q2 2023 RESULTS PRESS RELEASE 5and end-to-end cash management. We anticipate the robust growth momentum to continue for
the remainder of the year.
Our digital channels continue to gain in popularity, with a 31% increase in the number of
transactions conducted through those channels across all offerings. Having said that, face-to-
face remittances remain a preferred mode of transaction, with 81% of the remittances in the first
six months of the year conducted in our branches. This further validates our strategic decision
to gain market share by expanding the number of branches across the UAE.
While our cost base has increased compared to the year ago period, mainly attributed to our
aggressive expansion plans, regulatory requirements to achieve Emiratisation targets, and an
overall higher operating cost environment – an industry-wide trend- we believe that once those
15 new branches breakeven, they will contribute towards profitable growth and support EBITDA
margin expansion in the mid-term.
The recently issued Financial Stability Report 2022 by the Central Bank of the UAE solidified
our largest subsidiary’s, Al Ansari Exchange, market leadership position in that it was reported
as making up c.40% of combined Operating Income generated by all 84 operating Exchange
Houses in the UAE during 2022. Al Ansari Exchange also contributed 74% of UAE based
exchange houses’ consolidated net profit for the same period. This is a testimonial to the
Group’s aggressive growth strategy in a cost-efficient manner.”
H1 / Q2 2023 RESULTS PRESS RELEASE 6Other Major Updates
Al ANSARI EXCHANGE KUWAIT ACQUISITION
The Group anticipates completing the 100% acquisition of Al Ansari Exchange
Kuwait before the year-end and expects the impact from the consolidation to be
reflected in Q1 2024 and for the revenue and cost synergies to be unlocked
thereafter.
EMPLOYEES
The Group saw a 19.2% increase in the number of employees in H1 2023
compared to H1 2022 and an 8.3% increase compared to 31 December 2022.
The consistent growth in the number of employees is in line with the Group’s
expansion strategy.
Emiratisation has experienced remarkable growth in H1 2023, compared to the
same period in 2022 with a significant increase of 105%, in the number of Emirati
nationals, in line with the Group's support of the Government's Emiratisation
initiative. This growth can be attributed to various measures taken by the Group,
including providing training and development programmes, and actively seeking
out and recruiting Emirati talent at career events and in collaboration with top
universities in the region.
POST H1 REPORTING PERIOD UPDATES
EXPANSION INTO OMAN THROUGH ACQUISITION
On 7 August the Group announced its plans to expand its geographic footprint
into The Sultanate of Oman through the acquisition of a majority stake in one of
the country’s prominent exchange companies. The Group has received an initial
approval subject to meeting the necessary regulatory conditions. The acquisition
is still in its initial stage and is subject to the necessary regulatory approvals and
due diligence. The anticipated completion date for the acquisition is set for Q1
2024.
H1 / Q2 2023 RESULTS PRESS RELEASE 7Appendix 1 Description of Al Ansari Financial Services’ Product Offerings
Remittances The Group provides remittances at its retail branches and via its
digital channels, offering domestic and global money transfers
through its proprietary money remittance platforms, Cash
Express, Global Fund Transfer and Worldwide Cash Express, as
well as through its money transfer operator partners such as
Western Union and its transfer payment network where transfers
to bank accounts are executed via money transfer services such
as SWIFT or Ripple. The Group offers remittances for its retail
and corporate customers.
Bank Notes The Group's retail and wholesale foreign currency exchange
services primarily comprise the sale and purchase of foreign
currency directly to and from retail and wholesale customers. The
Group offers its bank notes services in over 70 currencies across
all its branches. The Group also offers pre-paid cards as part of
its retail foreign currency exchange services. Both the Group's
Travelcard and FlexiblePay products are reloadable pre-paid
cards that can store either single or multiple currencies and allow
the conversion of such currencies into other currencies by the
user. These pre-paid cards, where available, can be purchased
or reloaded in the Group's branches, online or through the mobile
a pp.
Wage Protection System The Group offers corporate payroll solutions, executing wage
(“WPS”) payments on behalf of companies operating in the UAE in
compliance with the directives of the UAE's Ministry of Human
R esources & Emiratisation, under the WPS initiative.
Other Services The Group's other offerings include, among others, bill payment
a nd end-to-end cash management solutions.
H1 / Q2 2023 RESULTS PRESS RELEASE 8Appendix 2: Glossary of Terms
Term Definition
Corporate business Products and services offered to Corporate Customers, including
or B2B business WPS, Bill Collection, End to End cash management, Remittances,
Bank Notes.
Digital business All transactions conducted through digital channels across all products,
including Remittances, Travel Card, Bill Collection and WPS.
Digital outward Outward personal remittances conducted through digital channels.
personal remittances
Operating Income Operating Income is defined as “Income” excluding “Other income” and
“Interest income – net”. In other words, it is income generated from the
Group’s operations.
EBITDA EBITDA is defined as “Profit for the year” excluding “Depreciation and
Amortisation”, “Finance cost on lease liabilities” and “Interest income –
net”.
EBITDA Margin EBITDA margin is calculated as EBITDA divided by operating income.
Number of The number of transactions conducted by the Group per product
transactions (Remittances, Bank Notes, WPS) or by channel (in person, digital) or
by customer segment (Retail, Corporate)
Value of transactions The aggregate nominal value of executed transactions, which is
calculated by: number of transactions x AED value per transaction.
Free Cash Flow Free Cash Flow is calculated as “EBITDA” minus “CAPEX”
H1 / Q2 2023 RESULTS PRESS RELEASE 9

Sentiment: positive