Shuaa Capital losses down 80pc
Dubai, February 10, 2013
UAE-based Shuaa Capital reported a net loss of Dh59 million ($16.05 million) for 2012, an 80 per cent improvement on 2011’s Dh293.8 million loss, the bank said.
This result is within the forecast range that Shuaa communicated in October 2012.
Shuaa ended the year 2012 with a strong balance sheet and liquidity, considerably improved its bottom line result and regained its standing in the regional financial services industry, the bank said.
The improvement was driven primarily by the successful completion of the restructuring and rightsizing programme. Total expenses for the year were reduced by Dh163 million. General and administrative expenses were down Dh37.7 million as the number of staff was reduced and processes made more efficient, it said.
The lending business recorded a Dh13.7 million expenses increase in line with its expansion plans in the UAE and Saudi Arabia. All other business units recorded a significant decrease of expenses totalling Dh51.4 million. This represents a year-on-year improvement of 29 per cent, the bank said.
Revenues for Q4 2012 were Dh25.2 million compared to Dh20.1 million for Q4 2011, representing an increase of 25 per cent and bringing 2012 annual revenues to a total of Dh137.3 million, a 38 per cent increase over 2011 revenues of Dh99.3 million. Revenues were buoyed by an increase in interest income and a positive swing in investments in Shuaa’s managed funds.
Shuaa’s total assets stood at Dh1.4 billion at the end of December 31, 2013. Cash and deposits rose 24 per cent to Dh423.3 million.
Throughout the year, the company continued to reduce liabilities by retiring debt. Total liabilities consequently fell by 38 per cent to Dh269.4 million from Dh437.2 million at the end of 2011, lowering interest expenses by 28 per cent to Dh11.7 million from Dh16.2 million in 2011, the bank said.
Sheikh Maktoum Hasher Al Maktoum, executive chairman of Shuaa Capital, said: “Despite the volatile market environment in 2012, Shuaa’s financial results for the full year are in line with our market guidance. Strategically, 2012 was a transformational year for Shuaa and the business achieved key milestones in its announced restructuring programme. We successfully completed four major turnaround initiatives, including the rightsizing programme, the reduction in non-core assets, the transformation of our industry leading balance sheet by strengthening our liquidity position and the announcement of a clear strategic, financial and operational roadmap with a focus on recurring revenue generation.
"The reduced scale of our industry and the renewed need for capital and advisory expertise are playing out in our favour. While most of the regional financial services industry is still in restructuring mode, Shuaa now has a competitive advantage and the ability to focus on revenue generation. The recent revitalization of our financial brand and the positive feedback on our strategic direction from shareholders and clients underscore our position of strength versus peers. Shuaa is now in a unique position to focus on growth which will result in a stronger performance in 2013.” - TradeArabia News Service