Shuaa narrows Q3 loss to Dh13.9m

Dubai-based Shuaa Capital has reported Q3 revenues of Dh34.9 million
(Q3 2011: Dh16.3m), underpinned by returns from its lending business, asset management and from investments in Shuaa managed funds, the firm said in a media statement.

Shuaa recorded an overall loss for the Q3 period of Dh13.9m, down from a loss of Dh156.2m reported in Q3 2011. During the nine-month period ended September 30, 2012, the group recorded a reduced loss of Dh38.3m, compared with a loss of Dh181.9m for the corresponding period in 2011, “principally due to a rise in 9M 2012 revenues to Dh112.1m from Dh79.2m in 9M 2011,” the company said.

“The third quarter results prove that we took the right decisions to reduce our cost base against the uncertain market environment, exit non-core businesses and investments, focus on liquidity management, and reduce the volatility in our asset base. We have a clear plan to reach profitability and I am pleased that we continue to move in the right direction,” said HH Sheikh Maktoum Hasher Al Maktoum, Executive Chairman of Shuaa Capital.

“Our strategy implementation is making good progress. We are transforming Shuaa to a fully integrated investment banking services platform to meet the demands of our client base, redeploying our balance sheet while maintaining cost and risk control. We have already begun to expand our credit offering and are managing for profitability in our equities businesses,” he added.

“The response from our shareholders, our banking partners and the wider market to our new strategic direction has been overwhelmingly positive. It is early days, but as a team we have become energised and united behind our strategy. We have set ourselves challenging but realistic targets to act as milestones for our recovery and we look forward to achieving these aspirations.”

The rise in Shuaa’s revenues was supported by gains from Other Investments of Dh10.4m compared to losses of Dh38m in 9M 2011. The reduced loss was supported by 9M 2012 total expenses, which saw a substantial drop to Dh160.1m (9M 2011: Dh223m).

As part of its new strategy, Shuaa implemented a systematic rightsizing program which it says has significantly reduced overall business running costs. The firm says it has reduced cash outflow from Dh10.2m per month in 2011 to Dh4m per month by the end of September 30, 2012. “This is expected to be reduced further to Dh3.5m per month by the end of the current financial year; overall a target reduction of 67 per cent,” it said in the statement.
 

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