SHUAA Capital results for first nine months of 2023 outline balance sheet consolidation

SHUAA Capital results for first nine months of 2023 outline balance sheet consolidation

SHUAA Capital p.s.c (DFM: SHUAA) today announces its unaudited financial results for the first nine months of 2023, outlining clear plans to consolidate its balance sheet amid a one-time non-cash impairment charge.


SHUAA’s primary focus in the third quarter of 2023 has been addressing legacy issues and completing its previously announced capital optimisation process to strengthen the balance sheet through a capital reduction and subsequent capital increase via a rights issuance. The objective is to reposition SHUAA activities on core businesses and deliver a spectrum of diversified products and outstanding service to a selective clientele. In line with this objective, SHUAA booked an impairment on its legacy goodwill and provisions against legacy assets, resulting in a net loss of AED 570 million YTD.


SHUAA reported operating revenues reaching AED 128 million in YTD 2023, a 52% increase compared to the same period last year (for adjusted reported revenues on a like-for-a-like basis). Net Operating Income for YTD 2023 was AED 33 million, up from AED 4 million in the same period last year. These figures reflect the impact of both revenue growth and cost-saving measures implemented in recent months.


SHUAA recently completed a key step in its capital optimisation plan with noteholders approving extending the maturity of a USD 150 million group-owned special purpose vehicle bond. Subject to regulatory approvals, SHUAA intends to convene a shareholders’ General Assembly to initiate a capital reduction and a capital increase. These strategic steps are designed to forge a significantly improved and sustainable capital structure. The repayment and conversion of outstanding bonds through rights issuance proceeds will result in a perpetual reduction in finance costs of over AED 40 million annually, enabling the Company’s operating performance to translate to future shareholder value.


As part of the capital optimisation process, SHUAA is currently engaged in discussions with its creditors and the regulator to secure the necessary approvals to proceed to the next stage. The delay in releasing SHUAA’s financial results is due to a pending temporary covenant waiver, and negotiations are ongoing with the senior creditor. SHUAA’s board and management have consulted the regulator and opted to release the financial statements to progress towards the capital optimisation plan, which will improve the Company’s financial position significantly. The company aims to reduce leverage on the balance sheet, thereby establishing a solid foundation for future value creation, benefiting all stakeholders.


“The Board of Directors and leadership team under Wafik Ben Mansour are focused on delivering the next chapter of SHUAA’s journey in its fifth decade of operations, with the completion of the capital optimisation process creating a sustainable capital structure that will benefit from our strong operational platform and deliver long-term value for all our stakeholders,” said Fadel Al Ali, Chairman of SHUAA Capital.

Group Financial Highlights (unaudited)

Key MetricsYTD 2023YTD 2022% YoY
Revenues*AED 128mAED 84m52%
Net Operating Income**AED 33mAED 4m 725%
Net Profit (Loss)(AED 570m)(AED 144m) -
Cost-Income Ratio**74%98% 24%

* excluding discontinued operations in 2022           ** excluding one-off items and carry expense

Key financial review

Segmental review