Shuaa Capital Q2 revenue falls 38pc to $6m
Dubai, August 9, 2012
Dubai-based Shuaa Capital, a leading financial services company, posted revenues of Dh22.2 million ($6.04 million) for the second quarter of the year, as against Dh35.7 million for the same period in 2011.
Second quarter revenues were underpinned by returns from Shuaa’s lending business and from investments in Shuaa managed funds, a statement said.
While Shuaa recorded an overall loss of Dh15.9 million during the second quarter (Q2 2011: profit Dh0.6 million) the period saw better results in the Investment Banking and Brokerage divisions.
Revenues for the first half (H1) amounted to Dh77.2 million as against Dh62.8 million last year, and the company recorded a loss of D24.4 million (H1 2011: loss Dh25.7 million) principally due to the continued tightening of G&A expenses and the reduction in the loss from other investments.
Shuaa’s balance sheet remains strong with total assets of Dh1.5 billion. The Company retains a healthy cash balance of Dh272 million at the period end, down from Dh345 million on March 31, reflecting further repayment of loans.
Net debt currently stands at Dh194 million as compared to Dh251.3 million at the end of June 2011. Shuaa retains a strong liquidity position going forward, the statement said.
Monthly operating expenditure has been reduced down to Dh4.2 million from over Dh10 million during the year 2011. It is expected that with the final rightsizing measures in Q2 working through the system and planned operational streamlining, this will reduce further to an operational run rate of around Dh3 million per month, the statement said.
This reduced cost base will ensure Shuaa reaches its target of improving operating expenditure by over 70 per cent and put the business on a solid foundation to capitalise on the expected increase in revenues.
Sheikh Maktoum Hasher Al Maktoum, executive chairman of Shuaa Capital, said: “The implementation of our cost cutting measures together with many other important strategic decisions, are beginning to bear fruit.”
“During the first half of the year, we have seen better results in both our Investment Banking and Brokerage divisions which is a significant moment as we start to see results of our turnaround strategy. For the brokerage division, in particular, we took rigorous cost cutting measures, including the exit from retail brokerage, allowing us to show improved results.
“We have significantly reduced the overall running costs to a rational level while maintaining our operational integrity. We look forward to sharing the next phase of our strategy by the end of the current quarter,” he added. – TradeArabia News Service