There is a substantial increase in core revenue due to stable recurring income and gains in managed funds. AED 317 million in net cash generated by operating activities

• Profit for the year in AED 24 million, affected by one-off net charges of AED 313 million. The net earnings after one-off expenses were AED 227 million.
• The goal is to increase the number of employees in the enterprise within a framework of continuous cost control.
• Progress continues on the balance sheet improving with the closing of non-core units and significant deleveraging in line with the long-term plan.
• The board has recommended that there be no dividends for 2021 to fund the funding of initiatives to grow.

United Arab Emirates: SHUAA Capital psc (DFM: SHUAA), the most prominent investment and asset management platform within the region, is now awaiting approval from the board for its financial statements that have been audited in the year ending 31 December 2021.

Trending

Most Common QR Activation Code 001-$wag$-sfap49glta4b7hwyl5fsq-3802622129

The FY 2021 results show the continued improvement in achieving the group’s strategic plan. Although the net profit of SHUAA and its affiliates (the “Group”) of AED 24 million was lower by 81% year-on-year from AED 125 million in the year 2020, the final result also included one-time charges of AED of 203 million during the fourth quarter that was mainly related to valuation impairments as a result of decisions to accelerate the process of restructuring the illiquid, legacy investment portfolio. SHUAA’s net income on a comparable basis would be AED 227 million by 2021. The net costs increased by AED 16 million over SHUAA’s initial results after a final valuation assessment of certain assets that are not liquid. In addition, EBITDA decreased, going between AED 349 million in 2020 and AED 218 million by 2021 due to the valuation impairments. After accounting for one-off adjustments would have been AED 421 million.

Our core revenue continues to grow towards the top-quality payments we are targeting in our plan, with the net commission and fee income increasing by 21% year over one year and reaching AED 265 million for the last year. We can also control costs with operating expenses increasing 6percent year-on-year by focusing on strategic hiring across the entire business.

Reduced proactive non-core assets, and the deleveraging of the balance sheet

Over the year, the group continued to control its balance sheet actively. Based on our approach to concentrate on two main business segments (asset managing and the investment bank) and strengthen our balance sheet and balance sheet, the group continued to oversee and reduce the number of assets in its non-core division. Since its beginning, the unit has produced a net AED around 188 million in cash profits in the group. As a result of disposing of these assets, the non-core unit was shut down during the 4th quarter of 2021. the remaining assets were moved to the principal investments, which will be managed effectively and in keeping with the group’s other investments. In addition to closing the non-core business unit, the group is restructuring an insolvent, old portfolio, absorbing the impact of the devaluation in the year. The restructured portfolio saw the group decrease its leverage adjusted1 percentage by 17 percent.

Enhancing our offerings and delivering to our clients

The year 2021 was when SHUAA introduced key hirings across the entire business, most notably in real estate and customer coverage, with headcount growing by 33 percent. The promotion of two top executives, which was announced in April, ensured that the group kept its investment policy of targeted investments in both product and relations capabilities.

The group’s Asset Management activities have delivered an impressive performance over the year and built on the gains achieved in the year 2020. A new chief executive in real estate will further strengthen the group’s capability to provide the highest quality service to customers across various markets and geographical regions.

The flagship of the Group’s Goldilocks fund has been active in the market and identifying investment opportunities focusing on intrinsic value that is high and specific turnarounds for companies. It continued to show outstanding outperformance against benchmarks through 2021 and has grown by 241% since the fund’s inception. In the private market, the 2020 deal, which resulted in the Thalassa fund purchase of Stanford Marine Group, had its first full year of excellent performance in the base business that created value for shareholders of the fund. Within Debt, which launched as a vertical in the year 2020, the team was able to structure and invest in the USD 50 million Sukuk issue of the Pure Harvest fund. This innovative deal helped a local startup to get venture-backed debt financing from capital markets.

Outlook

Although the group is operating in the face of geopolitical uncertainty around the world and increased market volatility, the constant progress in the company’s core business following the merger of SHUAA Capital with Abu Dhabi Financial Group in 2019 makes it possible for management to remain optimistic of the group’s capability to enhance its position as a market leader and provide significant value to its shareholders and investors.

Fadhel Al Ali, the chairman of SHUAA Capital, said: “Despite continued wider market uncertainty, SHUAA has focused on continuing to provide to our customers. The model of working with local capabilities has led to several notable successes in the areas where we are able to replicate this performance including that of the Investment Banking team’s work on behalf of the Anghami. We anticipate this model will be beneficial to both our clients and shareholders in the near future.”

In announcing SHUAA’s preliminary 2021 outcomes, Jassim Alseddiqi, Group Chief Executive Executive Officer for SHUAA Capital, said: “SHUAA is continuing to grow through the year, expanding its offerings to clients. As we near the conclusion of our cleaning process for core and non-core investment portfolios we’ll intensify the focus of our business on generating revenue and shareholder returns while being strict control over expenses. We’re always looking for ways to satisfy the needs of our current as well as new clients. We remain optimistic about the many long-term possibilities for our company that will yield value to our shareholders.”