- Decline in revenue for some parts of the business, including operating income – with Argentine peso and sales of parts of the firm partly to blame
- Rises reported in some areas though
- “We are focused on executing our long-term strategy, opening our unique cross-border platform for incremental growth opportunities”, says CEO
Major cross border payments provider Western Union has announced that it has experienced a drop in net income of $135m over the course of the last quarter.
According to its official accounts, this constitutes a drop of 35% for the company compared to the same quarter in the previous year.
In that quarter, the figure was registered at $208.6m.
However, the drop was reflected year on year in terms of operating income too.
It went down from $302.6m to $197.4m in the same period.
In a reflection of just how sensitive the firm’s cash flows can be to foreign exchange market trends, the move of the dollar to become stronger against the Argentine peso in particular caused overall revenue to decline by 2% or so.
However, some parts of the business saw a rise.
Western Union Business Solutions, which is the arm of the firm that is business-to-business in nature, saw firm and consistent revenue development.
The consumer-to-consumer part of the business saw reported revenues go up by 1%.
Part of the reason for the revenue drops was ascribed to the sale of some parts of the business, namely Paymap and Speedway.
The CEO and president of Western Union, Hikmet Ersek, was keen to emphasise how “solid” the results were.
“Third quarter results were solid, as we produced strong adjusted margins and improved consumer money transfer revenue growth, while completing major actions to advance our new strategy and the restructuring programme”, he said.
“We are focused on executing our long-term strategy, opening our unique cross-border platform for incremental growth opportunities and optimising our existing businesses, while also generating significant efficiencies and margin expansion”, he added.
As evidenced by MoneyGram’s release last week, company reporting does not always reveal an accurate picture of what’s going on.
A headline claim that Western Union has seen an income drop may alarm some who are not familiar with the standards of these reports.
In reality, large online money transfer corporations such as Western Union will not always fear this kind of development.
Under the hood, it’s apparent that the reasons for the income drop – such as sales of parts of the business – are well-explained.
While there’s no such thing as a crystal ball in this industry, it’s difficult to imagine Western Union ceasing to be a major player in the cross border payments world any time soon.
To keep up to date with what else is going on in the cross border payments world, head over to our collection of news articles and have a read.
