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Full Year 2011 Results

13 February 2012

  • FY2011 income generated from interest, fees and commissions and trading was AED 131.1 million before losses on investments in SHUAA managed funds of AED 31.8 million; total revenues were AED 99.2 million
  • Total expenses were AED 362.3 million of which AED 152.6 million are directly related to brokerage
  • FY2011 loss was AED 293.8 million, including impairments, provisions and valuation adjustments of AED 198.8 million; this includes AED 115.1 million in restructuring costs related to brokerage, a AED 30.7 million loss on other investments, 31.8 million loss on SHUAA managed funds and AED 10.9 million of Group restructuring costs and 10.3 million of other expenses.
  • Balance sheet remains solid with total assets of AED 1.6 billion, including AED 340.2 million in cash, against total liabilities of AED 437.2 million. - Shareholder’s equity stands at AED 1.2 billion, equivalent to AED 1.1 book value per share
  • Asset Management and SME Finance were profitable in Q4 and FY2011
  • Assets under management increased by 25% to AED 850 million from AED 680 million this time last year
  • Good progress made on rightsizing program; SHUAA reduced employee related costs by 39%

SHUAA Capital today reported results for the fourth quarter and year ended 2011. Revenues in the fourth quarter 2011 were AED 20.1 million (FY 2010: AED 42.8 million) and the Company reported a net loss of AED 111.8 million (FY 2010: net loss AED 186.7 million). Revenues for the full year 2011 were AED 131.1 million (FY 2010: AED 176.2 million) before losses on investments in SHUAA managed funds of AED 31.8 million (FY 2010 gain on investments AED 12.2 million). Overall for the financial year 2011 the Company had a total net loss of AED 293.8 million (FY 2010: loss of AED 223.7 million). The majority of the loss, AED 129.9 million, is directly attributable to brokerage. This includes one-off costs related to closing down SHUAA Securities offices in Jordan, Egypt as well as significantly reducing its presence in Abu Dhabi and Riyadh, related employee termination expenses and provisions as well as an AED 69.7 million goodwill impairment charge for the exit from its retail brokerage activities. The remaining goodwill of AED 34.1 million, accounted for at year-end 2011, relates solely to Gulf Finance.

The Company’s balance sheet at the year-end remained strong despite the challenging trading environment. Total assets were AED 1.6 billion. SHUAA had a strong cash position at year-end with AED 340.2 million at hand, down slightly on last year’s position of AED 397.1 million. Total liabilities fell to AED 437.2 million from AED 447.6 million principally due to a drop in medium term debt levels. As of 31 December 2011, non-core assets stood at AED 349.2 million compared to AED 564.5 million at year-end 2010.

HH Sheikh Maktoum bin Hasher Al Maktoum, Chairman of SHUAA Capital, said:
“Since my appointment in May 2011, and after careful consideration by the Board of Directors, we have taken decisive and necessary action to eliminate legacy risks and clear the path to achieving our vision of becoming a truly regional financial services provider. This required us to take significant write-downs on our legacy portfolio, a rigorous restructuring of our cost base and a material headcount reduction, primarily in brokerage. The cost cutting measures have reduced both the number of employees and employee related costs by 39%, which is equivalent to annualized cost savings of AED 46 million, and real estate related expenses of AED 3.5 million. We have pulled out of the loss making retail brokerage business, reduced our risk positions and are now implementing a new strategy under the leadership of Michael Philipp who joined SHUAA in October 2011. Since then, we have accelerated the pace and direction at which we are moving and our actions, coupled with our solid balance sheet, will give our shareholders increased financial visibility for the year ahead and an opportunity to renew their confidence in SHUAA.”

- ENDS –

About SHUAA Capital psc: Since 1979, SHUAA Capital has played a prominent role in shaping the financial services landscape of the GCC and will continue to be at the vanguard of regional integration into global financial markets. SHUAA Capital maintains leadership positions in Investment Banking, Asset Management, Brokerage, Private Equity and Lending. Headquartered in Dubai, in the United Arab Emirates, SHUAA Capital has a regional presence with offices in Abu Dhabi, Riyadh, and Doha. Embedded in the dynamic economic environment of the Gulf Cooperation Council, SHUAA Capital provides a broad range of financial services to corporations, governments, institutional clients, and high net worth individuals.

For further information please contact:

Oliver Schutzmann
Head of Investor Relations & Corporate Communications
Tel: +971 4 319 9872
Mobile: +971 50 640 5722
oschutzmann@shuaa.com

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