SHUAA Capital Reports Strong Full-Year 2021 Results, Reflecting Strong Performance From Its Core Business

0
  • Annual profit of AED24 million impacted by net one-time charges of AED203 million; net profit excluding exceptional charges AED 227 million
  • Targeted recruitment for company-wide growth within a strong and continuous cost discipline
  • Continued progress in strengthening the balance sheet with the closure of a non-core unit and significant deleveraging in line with the long-term strategy
  • The Board of Directors has recommended no dividends for 2021 to support the financing of growth initiatives

United Arab Emirates: SHUAA Capital psc (DFM: SHUAA), the region’s leading asset management and investment banking platform, has received board approval for its audited financial statements for the year closed on December 31, 2021.

The results for the 2021 financial year demonstrate continued progress in achieving the Group’s strategic program. While the net profit of SHUAA and its subsidiaries (the “Group”) of AED24 million was down 81% year-on-year from AED125 million in 2020, the result included one-time charges of AED 203 million net in the fourth quarter, mainly related to impairments following the decision to accelerate the restructuring of a historical and illiquid investment portfolio. SHUAA’s net profit on a comparable basis would have been AED 227 million in 2021. These net charges increased by AED 16 million compared to the Group’s preliminary results, following a final assessment of certain illiquid assets. While EBITDA also decreased from AED349 million in FY 2020 to AED218 million in 2021 due to these impairments, taking into account the effect of one-time adjustments, it would be increased to AED 421 million.

Our core revenue continues to progress towards targeted high quality revenue as part of our strategy, with net commission revenue up 21% YoY to reach AED265m YOY, while controlling expenses with operating expenses up 6% year-on-year. year, with targeted strategic hires across the company.

Proactive reduction of non-core assets and balance sheet deleveraging

During the year, the Group continued to proactively manage its balance sheet. In line with our strategy to focus on our two main business segments (asset management and investment banking) and to strengthen our balance sheet, the Group continued to manage down the assets held within its non-strategic unit. Since its inception, this unit has generated net cash proceeds of AED 188 million for the Group. Following the progress of the disposal of these assets, the non-strategic unit was closed in the fourth quarter of 2021 and the residual assets transferred to the main investments, where they can be managed coherently and in line with the other investments of the Group. . In addition to the closure of the non-strategic unit, the Group restructured an illiquid historical portfolio absorbing the effects of the year. These activities enabled the Group to reduce its adjusted leverage ratio1 by 17 percentage points.

Strengthen our offer and deliver to our customers

In 2021, SHUAA made key hires across the business, including in real estate and client coverage, with a 33% increase in core headcount. In addition to the internal promotion of two senior executives, announced in April, this has enabled the Group to maintain its policy of targeted investments in both products and customer relations.

The Group’s asset management business delivered a strong performance during the year, building on the progress made in 2020. The appointment of a new Chief Property Officer further strengthens the Group’s ability to offer a high quality offer to its customers in different geographies and markets.

The Group’s flagship fund, Goldilocks, continued to be active in public markets, identifying investment opportunities focused on high intrinsic value and company-specific turnarounds. It maintained its strong outperformance record against its benchmarks in 2021 and has risen 241% since its inception*. In private markets, the 2020 transaction that saw the Thalassa fund acquire Stanford Marine Group enjoyed its first full year with strong performance in the underlying business creating value for fund shareholders. Within Debt, launched as a vertical in 2020, the team successfully structured and invested in Pure Harvest’s $50 million sukuk issuance, an innovative transaction helping a local start-up company secure funding through risky borrowing on the capital markets.

Outlook

As the Group continues to operate in an environment of global geopolitical uncertainty and heightened market volatility, continued progress within the core business since the merger of SHUAA Capital and Abu Dhabi Financial Group in 2019 enables management to remain confident in the Group’s ability to rely on its leading position in the market and generate significant value creation for its investors and shareholders.

Fadhel Al Ali, Chairman of SHUAA Capital, said, “Despite continued market volatility, SHUAA has been focused on continuing to deliver for its clients. The local capacity partnership model has seen a number of high-profile successes in areas that we can look to replicate that success, including the work of the Investment Banking team on behalf of Anghami. We expect this model to continue to benefit both customers and shareholders in the future. »

Commenting on SHUAA’s preliminary results for 2021, Jassim Alseddiqi, Group Managing Director of SHUAA Capital, said, “SHUAA continued to make progress during the year by expanding its client offering. As we near the end of the cleanup of legacy and non-core investments and portfolios, we will focus more on generating revenue and shareholder returns while maintaining strict cost discipline. We are continually looking for new ways to meet the demand of existing and new customers and remain confident of the many long-term opportunities for our business that will create value for our shareholders.

Share.

Comments are closed.