Western Union expects better 2021 after COVID-19 hit, says CFO

In this news, we discuss the Western Union expects better 2021 after COVID-19 hit, says CFO.

LONDON (Reuters) – Western Union Co WU.N, the world’s largest money transfer company, expects prospects to improve for 2021 as people adjust to the novel coronavirus and expectations of Additional stimulus from the US government to help the economy, its chief financial officer said. Tuesday.

Remittances, a vital source of external finance for developing countries, have fallen this year due to a slowdown in new migration and some existing migrant workers returning to their countries of origin after losing their jobs.

Western Union, which relies on such transfers for its business, last week reported third-quarter revenue of $ 1.3 billion compared to a Refinitiv IBES estimate of $ 1.25 billion and reinstated its financial outlook for 2020 with generally accepted accounting principles (GAAP) earnings per unit in the range of $ 1.72 to $ 1.77.

“In general, I would expect 2021 to be better than the one we’ve seen this year,” Raj Agrawal told Reuters in a video interview. “At least here in the United States, we should be getting an economic stimulus. The elections will be behind us, all of these things will help the United States, which is a big part of our business, and I think people have learned to live a little more with the pandemic and we will have better times next year. . “

The World Bank expects remittance flows to decline by 7% to $ 666 billion in 2020, before falling further to 7.1% in 2021. The contraction estimated by the World Bank for 2020 has was less severe than the drop of nearly 20% that it had forecast in April.

While an easing of COVID-19-related lockdowns helped Western Union’s retail resumption in the third quarter, the company was also boosted by faster-than-expected growth in its digital business, which includes money sent via the Internet, mobile or its digital partners.

In the past two quarters, Western Union’s digital business had grown by 40 to 50 percent, Agrawal said, adding that digital revenues accounted for around 21 percent of its total consumer revenues, with the remaining 79 percent driven by the retail business.

Reporting by Tom Arnold; Editing by Lisa Shumaker

Original © Thomson Reuters

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