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Q1 2012 Results

07 May 2012

  • Q1 2012 revenues increased by 103% to AED 55.0 million over Q1 2011 and net loss for the period narrowed to AED 8.5 million as the business makes progress
  • Overall expenses down 7.4% to AED 62.1 million vs Q1 2011 as our rightsizing program starts to show results
  • Major reduction in monthly operational expenditure primarily due to decrease in headcount and reduction in rent related expenses
  • Balance sheet remains strong at AED 1.57 billion underpinning business recovery. Cash position strengthened to AED 345.1 million and total liabilities reduced to AED 405.8 million from AED 437.2 million
  • Assets under management in Asset Management remained stable at AED 1.5 billion
  • HH Sheikh Maktoum Hasher Al Maktoum has become Executive Chairman and Colin Macdonald appointed Group CEO

SHUAA Capital (‘SHUAA’) today reported results for the first quarter 2012. Revenues were AED 55.0 million (Q1 2011: AED 27.1 million) underpinned by continued strong returns from SHUAA’s Lending business and from investments in SHUAA managed funds. The loss for the period narrowed considerably to AED 8.5 million (Q1 2011: loss AED 26.3 million).

SHUAA has continued to focus on cost cutting measures during the first quarter of 2012 and has seen a dramatic improvement in its monthly operating cash expenditure from AED 11 million to AED 4.5 million per month. This is a result of continued cost cutting measures including a reduction in the number of employees, primarily from brokerage, following the exit from the Company’s retail brokerage business, and a significant reduction in annualised rent related expenditure. SHUAA Capital plans to further improve this operating cash expenditure to below AED 3.0 million per month by the end of the first half of 2012.
SHUAA’s balance sheet remained strong with total assets marginally down at AED 1.57 billion compared to AED 1.60 billion at the year end. The cash position strengthened slightly to AED 345.1 million from AED 340.2 million and this has been helped by the continued drop in operating costs and the consequential drop in monthly operating expenditures. Total liabilities fell to AED 405.8 million from AED 437.2 million due to a further reduction in medium term debt levels.

Just after the period end, SHUAA announced that HH Sheikh Maktoum bin Hasher Al Maktoum assumed the position of Executive Chairman and Colin Macdonald was appointed Group Chief Executive Officer. Colin, who started at SHUAA on 12 April 2012 has had over 25 years banking experience in Europe, the Middle East and Africa.

HH Sheikh Maktoum bin Hasher Al Maktoum, Executive Chairman of SHUAA Capital psc, said:
“Our business turnaround strategy continues to make good progress and positions us well for 2012 and beyond. I have personally led our relentless focus on reducing costs and am pleased to say that it has yielded strong results. We are pleased with the progress made on improving our monthly operating cash expenditure, which is 57% lower than a year ago. The cost cutting measures that we have taken during the first quarter of 2012, will be recognized by the end of the second quarter. This will lead to a total reduction of operating expenditure of 71% since the launch of our systematic rightsizing program in 2011.

Whilst we have made strong progress on cost cutting we are turning our attention to generating revenues. This shift in focus will gather momentum as we build out our core capabilities in the areas of Credit, Asset Management and Advisory. Recognizing the fundamental strengths of our balance sheet, market position and heritage, there are many exciting initiatives in train. Even though we are in a challenging banking environment, we believe that we are now equipped to exploit the market situation to our advantage.”

- 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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