Dubai-based Shuaa Capital today reported revenues of Dh55 million ($14.97 million) for the first quarter of 2012, an increase of 103 per cent over Q1 2011 (Dh27.1 million).

The loss for the period narrowed considerably to Dh8.5 million from Dh26.3 million for the same period last year, a statement said. 
The results were underpinned by continued strong returns from Shuaa’s lending business and from investments in Shuaa managed funds, it said.

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 Dh11 million to Dh4.5 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,” it said.

Shuaa Capital plans to further improve this operating cash expenditure to below Dh3.0 million per month by the end of the first half of 2012, it said.

Shuaa’s balance sheet remained strong with total assets marginally down at Dh1.57 billion compared to Dh1.60 billion at the year end.

The cash position strengthened slightly to Dh345.1 million from Dh340.2 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 Dh405.8 million from Dh437.2 million due to a further reduction in medium term debt levels.

Shuaa recently announced that 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 April 12 has had over 25 years banking experience in Europe, the Middle East and Africa. 

Sheikh Maktoum 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 per cent 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 per cent 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,” he said. – TradeArabia News Service