Business performance during Covid-19: Consumers see a decline, while B2B sector experiences growth
In a recent report, OFX, a leading player in the foreign exchange market, unveiled its financial results for the first half of the 2020/2021 financial year. The results demonstrate the company's resilience and adaptability in the face of the ongoing Covid-19 crisis.
The Corporate segment at OFX witnessed a shift towards offshore share purchases and disposals, which have a lower transaction value. Despite this, the Online Sellers segment saw a 16% revenue increase, with a notable 52% increase excluding Asia. This diversity in revenue streams is one of OFX's key strengths, as it also includes private clients and various B2B offerings.
The Corporate segment also reported a 33% year-on-year increase in revenue from new clients. However, the private client business saw a decline in revenue, primarily from April to June, due to the impact of the pandemic. The average transaction value at OFX decreased 12% year-on-year as a result of the crisis.
The decline in revenue was not uniform across all regions. OFX reported a 5.6% drop in revenue for the first half of the financial year. Revenue in Asia declined 30%, while revenue in Europe decreased 8%. North America, however, continues to be a strong growth area for OFX, with 14.5% growth in Q3.
The performance of OFX across all its segments offers useful benchmarks. OFX's CEO, Skander Malcolm, spoke with the media for more insight regarding the reported results. Malcolm stated that OFX will focus on deals like the WiseTech partnership instead of digital bank partnerships, as the company aims to leverage its diverse revenue streams as its growth engine, particularly in the US and Europe, similar to the strategy of Moneycorp.
Malcolm also expressed optimism about the recovery of the private client segment. He emphasised that OFX has seen trade recovering across its verticals, performing better than many of its peers, especially in the B2B space.
The unstable economic environment has led to a 34.5% decrease in OFX's EBITDA. However, OFX remains optimistic about its future prospects, with plans to focus on B2B growth and expecting its WiseTech partnership to generate AUS$5m of annual revenue by 2024.
In conclusion, OFX's first half financial results for the 2020/2021 financial year reflect the challenges of the current economic climate but also highlight the company's resilience and adaptability. The company's diverse revenue streams and focus on B2B growth, particularly in the US and Europe, position OFX well for the future.
