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02 March 2024

Shuaa slips into red in Q4 on stock market losses

Dubai Financial Market index fell 2.6% MoM in January. (File)

By Staff

Dubai-based investment bank Shuaa Capital fell in the red in the fourth quarter of 2014, blaming losses in the stock market.

The company posted net loss of Dh14.8 million in Q4 2014 compared to net profit of Dh3.8m in Q4 2013.

The UAE stock markets have been witnessing volatility for the last few months due to drop in crude prices.

The Dubai Financial Market (DFM) index fell 2.6 per cent month-on-month (MoM) in January, compared to an 11.9 per cent MoM decline in December. While Abu Dhabi’s ADX declined 1.6 per cent MoM in January, following a 3.1 per cent MoM fall in December.

Revenues for Q4 2014 were Dh25m as against Dh64m in Q4 2013, a drop of 61 per cent.

Sheikh Maktoum Hasher Al Maktoum, Executive Chairman of Shuaa Capital, said: "During 2014, our investment banking division worked on a number of public and private transactions, the funds in our asset management unit outperformed the market, we saw continued expansion of our capital markets division and solid growth in our SME lending business. At the same time diligent cost control measures remained a top strategic priority.”

Shuaa net profit for 2014 jumped to Dh25.8m from Dh2.8m in the previous year, an increase of 821 per cent.

Recurring revenues from core fee and income generating business divisions helped the company improve its net profit.

Revenues increased to Dh213m compared to Dh198m recorded in 2013.

The result was driven by strong gains recorded in the asset management, investment banking and SME lending divisions.

Operating expenses dropped to Dh165m from Dh174m in 2013 as rigorous cost control measures were maintained and further reductions in general and administrative costs were recorded.

Total assets increased by Dh117m to Dh1.6 billion at the end of the year.

Liabilities increased to Dh459m from Dh376 million as a new partially used syndicated loan facility of Dh500m was secured in Q4 2014.

Overall, Shuaa's net assets were up at Dh1.1bn while the leverage ratio at year-end 2014 stood at 0.29x compared to 0.23x at the end- 2013.

Sheikh Maktoum said: "We have had a steady start to 2015 and despite market volatility we remain confident that the business will continue to build on the earnings momentum generated in recent quarters. I would like to thank shareholders for their support as we have positioned the Company for the future. I look forward to supporting the new management team as they take the Company on to the next stage of its growth."