SHUAA Capital psc (DFM: SHUAA), the leading asset management and investment banking platform in the region, has announced its H1 2023 financial results. Net profit attributable to shareholders was AED 20 million, compared to an AED 164 million loss in H1 2022.
Group Financial Highlights
| Income Statement | H1 2023 | H1 2022 | % YoY |
|---|---|---|---|
| Net Operating Income* | AED 32.4m | AED 2.9m | 10x ⇧ |
| Expenses* | (AED 66.8m) | (AED 155.0m) | (57%) ⇧ |
| Net Profit | AED 20.0m | (AED 164.3m) | +112% ⇧ |
*excluding one-off items and carry expense
| Key metrics | H1 2023 | H1 2022 | % YoY |
|---|---|---|---|
| Cost-Income Ratio | 67% | 98% | (31%)⇧ |
| Leverage Ratio | 0.88x | 1.23x | (35%)⇧ |
Key financial review
- Total revenues of AED 99 million in H1 2023 (+68% year-on-year on a normalised basis) driven by recurring revenues contributed from all business segments as well as performance fees recognised in the asset management segment
- Cost to income ratio at 67% in H1 2023, down from 98% in H1 2022, highlighting the Group’s operating margin strength derived from cost optimisation initiatives undertaken last year
- AED 20 million net profit driven by the outperformance from managed investment and real estate funds coupled with robust sales and trading income generation in H1 2023
- Deleveraging continued in H1 2023, with debt-to-equity ratio further improving to 88% from 123% in H1 2022
- AED 173 million of debt repayments since December 2022, highlighting the Group’s continued commitment to deleverage and simplify its balance sheet and position for growth
Segmental review
- Asset Management, which encompasses investments funds and managed accounts across real estate, public and private markets and debt, reported first half revenues of AED 88 million in management and performance fees, up +11% compared to H1 2022
- Investment Banking, which provides corporate finance advisory, equity and debt capital markets, M&A, sales and trading, recorded an increase in revenues of AED 10 million (+25% compared to H1 2022) with growth in trading revenue offsetting lower advisory fees as no significant transactions were closed during the first half of the year
- Corporate segment, which manages principal investments, treasury and other shared services, reported no material revenues and is expected not to contribute further in the future as a result of the Group’s strategic initiative to divest from non-core assets and will only record unallocated expenses, finance costs and investment income
Delivering on our mission statement
SHUAA’s mission is to create sustainable value for clients, employees and shareholders by engineering innovative investment solutions and differentiated product offerings for institutional clients and high-net-worth individuals. The firm’s disciplined approach includes focusing on core businesses, divesting non-core assets, and managing risk effectively in a rapidly evolving operating environment.
“The first-half results underline SHUAA’s robust return to strong profitability, driven by our commitment to simplifying our balance sheet structure and reducing debt liabilities,” said Fawad Tariq Khan, Group Chief Executive Officer of SHUAA Capital. “Our existing portfolio and assets under management (AuM) reflect our strategy to diversify and boost our recurring fee income. Our Asset Management strategy continuously seeks out new investment opportunities and creates investment products for our increasingly diversified investor base. Moreover, our Investment Banking segment has seen a significant uptick in performance, with a revenue increase of 25% compared to H1 2022, and expectations to further strengthen our advisory capacity with our recent senior hires”.
