MoneyGram returns to year-over-year revenue growth in June in Q2 2020

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MoneyGram International, Inc. (NASDAQ: MGI) today reported financial results for its second-quarter ending June 30, 2020.

Second Quarter 2020 Business Highlights 

“We had a very strong quarter and materially outperformed on both the top and bottom-line, despite the continued global uncertainty from the COVID-19 pandemic,” said Alex Holmes, MoneyGram Chairman and CEO.

“In June we returned to year-over-year revenue growth on strong money transfer transaction growth of 10%. This return to growth was driven by the rapid expansion of our digital business as well as the continued improvement of our walk-in business.

Additionally, the resurgence of growth from the money transfer business, along with agile management of the business throughout the crisis enabled us to deliver year-over-year Operating Income and Adjusted EBITDA growth for the quarter.”

Holmes added: “We’re excited about the underlying momentum in our business driven by our digital transformation.

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The investments that we have made over the past few years have allowed us to build a fast-growing digital business which not only has higher customer retention and productivity rates but also surpassed the walk-in business during the quarter delivering higher margins on average.

MoneyGram returns to year-over-year revenue growth in June in Q2 2020 - Brand Spur

With digital now representing 27% of money transfer transactions, the business is providing a significant contribution to our bottom-line results.”

  • MoneyGram achieved 106% year-over-year digital transaction growth in the second quarter – a significant acceleration from the first quarter of 2020 where the company reported 57% growth.

Overall digital growth was driven by the following components:

    • MoneyGram Online, the Company’s direct-to-consumer channel, delivered 104% year-over-year transaction growth driven by strong consumer demand for the MoneyGram app, high customer retention rates, and increasing productivity rates
    • Digital partnerships, driven by key partners in the Middle East and the Asia Pacific, accelerated from 25% year-over-year transaction growth in the first quarter to 97% growth in the second quarter
    • Account deposit and mobile wallet transactions increased 148% which is an acceleration from the first quarter where the Company reported 80% year-over-year transaction growth
  • Digital transactions accounted for 27% of all money transfer transactions in the second quarter
  • The Company remains focused on executing the long-term strategy while managing through the crisis. During the quarter, the Company achieved a number of important milestones:
    • Expanded the loyalty program to new markets and launched product enhancements to improve the customer experience
    • Launched new wallet and account deposit partnerships in rapidly growing regions of the world
    • Strengthened the Company’s leading position around the world by signing and expanding partnerships, specifically overhauling key receive markets

Second Quarter 2020 Financial Results, Year-Over-Year

  • Total revenue was $279.8 million, a decline of 14% or 13% on a constant currency basis primarily driven by the impact of COVID-19 on the first part of the quarter as the Company reported positive revenue growth in the month of June
    • Money transfer revenue was $253.1 million, down 10% or 9% on a constant currency basis related to the impact of COVID-19 on the first part of the quarter
      • The Company reported positive money transfer revenue growth in the month of June on the strength of double-digit cross border transaction growth
    • Investment revenue was $4.3 million for the quarter due to lower prevailing interest rates
  • Total operating expenses of $257.8 million, improved $51.7 million or 17%
    • Compensation and Benefits were flat including a $5.9 million special compensation plan accrual to potentially restore compensation withheld during the quarter as part of the Company’s proactive response to the COVID-19 pandemic
    • Transaction and Operations Support expenses were down over 60% primarily driven by efficiencies and operating reductions previously disclosed as part of the Company’s proactive response to the COVID-19 pandemic
    • Included an $8.8 million net benefit from Ripple market development fees of $15.1 million, partially offset by related transaction and trading expenses of $6.3 million
  • Operating Income was $22.0 million which was an increase of 54%
  • Net loss was $4.6 million for the quarter
  • Diluted loss per share was $0.06 and diluted adjusted income per share was $0.01
  • Adjusted EBITDA increased 4%, or 5% on a constant currency basis, to $56.4 million
    • Adjusted EBITDA margin improved 340 basis points to 20%
  • Adjusted Free Cash Flow was $24.7 million, an increase of 24%
Read Also:  MoneyGram International Reports Third Quarter 2017 Financial Results

“As the ongoing COVID-19 crisis continues to impact countless lives around the world, the health, safety, and livelihoods of our customers, employees, and partners remain our top priorities.

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I’m extremely proud of how we’ve come together as a company over these last few months to exceptionally serve our diverse customer base of tens of millions of people who rely on our essential services,” concluded Holmes.

Balance Sheet Highlights

Cash and cash equivalents on hand at quarter-end were $130.6 million compared to $146.8 million at the end of 2019. As of June 30, 2020, the Company had repaid all outstanding borrowings under its revolving credit facility. Second-quarter interest expense was $22.7 million and capital expenditures were $9.8 million.

As announced earlier this week, MoneyGram has signed an amendment with the DOJ to defer the final $55 million payment to the end of the DPA in May 2021. The Government has agreed to extend the $55 million payment to provide additional time to consider the basis for potentially reducing the final payment amount.

The recent amendment also reduced the frequency of MoneyGram’s DOJ reporting from a monthly to a quarterly reporting cycle.

Third Quarter 2020 Outlook Update

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As a result of continuing economic uncertainty created by the COVID-19 pandemic, the Company is not providing a specific third-quarter outlook. However, if revenue trends remain in their current range, then the Company would anticipate sustained Adjusted EBITDA growth in the third quarter.

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Latest News

Next Meats, Purveyor of the World’s First Plant-based Yakiniku Meats, Is Now in Singapore

The Tokyo-based startup makes its debut in the alt-protein hotspot of Singapore

 

  • Next Meats has collaborated with Aburi-EN to deliver two new meal sets
  • Made with soybean proteins, the Kalbi contains no chemical additives or animal ingredients


SINGAPORE - Media OutReach - 14 April 2021 - Next Meats, a purveyor of the world's first plant-based yakiniku meats, is making its debut in the alternative protein hotspot, Singapore! The Japanese alternative meat company has collaborated this time with popular Japanese restaurant Aburi-EN, which will offer two types of set meals using the NEXT Kalbi (boneless short rib) for the very first time. Made largely from soy proteins, the NEXT Kalbi contains double the amount of protein and half the fats than that of regular meat and even more, it does not contain any chemical additives or cholesterol due to its lack of animal ingredients. Now, Singaporeans can enjoy yakiniku without the guilt!


MoneyGram returns to year-over-year revenue growth in June in Q2 2020 - Brand Spur

From left to right: Premium Kalbi Don Set and Stamina Teishouku Set

The two new menus available at Aburi-EN are the Kalbi Don Set (S$13.80) and the Stamina Teishoku (S$15.80) — which are available for a limited time only. Next Meats has specifically chosen to work with Aburi-EN as they are a Japanese grilled-meat specialist. The two menus are the culmination of many months of research and development, and they will also be Aburi-EN's first-ever plant-based dishes.


MoneyGram returns to year-over-year revenue growth in June in Q2 2020 - Brand Spur

For the Kalbi Don Set, Next Meat's Kalbi is grilled and served atop a bowl of fragrant Japanese steamed rice. Equally indulgent, the Stamina Teishoku features the Kalbi stir-fried with cabbage along with egg imported from Okinawa. The meat is then served with fragrant Japanese steamed rice, salad, pickles and miso soup. For both dishes, the meats are glazed with a special homemade sauce that packs an irresistible umami punch.

Both the Kalbi Don Set and Stamina Teishoku will be available at all Aburi-EN stores from April to July 2021.

An advocate of sustainable food production and better food security

The NEXT Kalbi is one of Next Meats' innovative offerings, which includes other plant-based delicacies such as the NEXT burger and NEXT gyudon (beef bowl). The company champions the importance of saving the planet and humanity through reducing the emission of greenhouse gases (which is produced from meat consumption and animal agriculture) and utilizing biotechnology to combat protein deficiency.

Through extensive research and development, Next Meats has culminated the knowhow on using molecular binding to mould vegetable proteins from powder. Buoyed by state-of-the-art, proprietary technologies, the company has successfully created vegan substitutes that replicate the texture of real meat.

About Next Meats

Hailing from Tokyo, Next Meats is a food-tech venture company that specialises in the research and development of Japanese-style alternative meat products. Its journey of product development began in 2017, and the company was officially established in 2020. Its portfolio of products includes plant-based burger patties, gyudon and yakiniku meats.

Social Media for Next Meats

Facebook: /nextmeats.singapore

Instagram: @nextmeats_singapore

Hashtags: #nextmeats #nextmeats_sg #japaneseplantbased


About Aburi-EN

Aburi-EN is Singapore's leading Japanese Grill restaurant chain, best known for delicious high quality grilled donburi bowls. Signature dishes include the Premium Buta Don with grilled chestnut-fed pork, Wagyu Karubi Don, and the Wagyu Stamina Don, made using A4/A5 Miyazaki Wagyu, which has won Japan's "National Wagyu Award" for 3 consecutive years, among many others. The homemade sauces give the meats and dishes an extra umami-ness. Aburi-EN is also known for affordable highballs and Japanese sours, which pair perfectly with the Aburi dishes.

Social Media for Aburi-EN

Facebook: /aburiensg

Instagram: @aburien.sg

Hashtags: #aburiensg #aburiendonburi #aburienjapanesegrill

Outlets

- Isetan Scotts:

350 Orchard Rd, #01-K1 Shaw House, Singapore 238868

- Causeway Point

1 Woodlands Square, #02-09B Causeway Point, Singapore 738099

- Jem

50 Jurong Gateway Rd, #01-04 Jem, Singapore 608549

- Vivo City

1 Harbourfront Walk, #01-159/160 VivoCity, Singapore 098585

- Novena Square

238 Thomson Rd, #01-89/90, Singapore 307683

- Guoco Tower

1 Wallich St, #B2 - 09, Singapore 078884

- Orchard Central

181 Orchard Central, Central, #01-16 Orchard, 238896

- Suntec City

3 Temasek Blvd, #B1-121 Suntec City Mall, Singapore 038983

- Nex

23 Serangoon Central, #01-63/64/65 Nex, Singapore 556083

Operating Hours

11am – 10pm, Daily

MoneyGram returns to year-over-year revenue growth in June in Q2 2020 - Brand Spur
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