Latin America Profits Highlight Intermex's Strategic Focus

Intermex, a leading player in the remittance sector, has reported a strong performance in Q3 and Q2 of 2020, despite the challenges posed by the global pandemic. The company, which focuses on remittances from the US to Central and South America, has demonstrated resilience and growth in a difficult year.

Last week, Intermex reported its quarterly earnings, revealing a significant focus on brick-and-mortar operations. Despite the increasing emphasis on digital services, physical stores remain vital for Intermex's operations. The company's highly profitable agents network, which concentrates on key corridors, sees agents handling twice as many daily transactions as those serving Western Union or MoneyGram.

Approximately 20% of Intermex's revenue comes from digital transactions paid out in bank accounts. However, the company's strategy remains rooted in brick-and-mortar, with a strong commitment to expanding its physical presence. This strategy has paid off, with Intermex reporting year-on-year growth every quarter in 2020.

The conversation with Intermex's President and CEO, Robert Lisy, provided insights into the growth drivers and future of the company. Lisy revealed that Intermex plans to grow its digital business with a substantial amount of free cash flow. The company is also considering M&A opportunities and expanding into new geographies such as Africa and Canada.

Intermex's focus on fast customer processing and real-time payments resulted in a 13% year-on-year increase in transactions for Q3 and a 3% increase for Q2, despite the lockdown. This performance was particularly impressive for a cash/agent-focused business during these challenging times.

The company's reported market share for the US to Mexico, Guatemala, Honduras, and El Salvador corridors is significant, at just under 20%. This stronghold in key corridors, combined with its commitment to both brick-and-mortar and digital services, positions Intermex well for future growth.

However, there is no publicly available information on which companies Intermex considered as potential M&A targets in 2021. Nonetheless, the company's strategic focus, impressive financial performance, and growth potential make it a company to watch in the coming years.