Western Union clocks 8% profit rise
Despite the negative impact of ongoing global economic slowdown, Western Union, a major player in the global money transfer segment, has reported an eight per cent rise in the first quarter net income.
The net income was up at $223.4 million (Dh820m) during the period as against the $207.1m in the previous corresponding period.
It saw growth in net income on account of a surge in consumer transfers and savings from cost-cutting measures being taken across the global markets.
The Europe, Middle East, Africa and South Asia region, which accounts for 43 per cent of Western Union's revenues, saw a decline of four per cent on transaction growth of 15 per cent when compared to previous year's first quarter. The revenues were also down by five per cent at $1.2 billion during the same period, but flat when adjusted for currency fluctuations. Western Union successfully closed the acquisition of the money transfer business of Fexco and grew its agent locations to 379,000 globally.
The company has incurred huge amount of expenditure on a restructuring plan during the first quarter and if this was excluded, the net income rise was only one per cent. Operating income margin was up 28 per cent, while EPS moved northwards by 19 per cent at $0.32.
Christina Gold, President and CEO, Western Union, said: "We are pleased with the Q1 results, particularly in light of the economic challenges. Global consumer-to-consumer transactions increased seven per cent for the period, and in combination with cost reductions, led to strong margins."
Performance in the Gulf was strong, declining only slightly from the fourth quarter of 2008. In February, Western Union said the global money-transfer market would grow more slowly in 2009. The company yesterday reaffirmed its 2009 outlook and said it expects revenue to decline five per cent to eight per cent.
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