- Net profit attributable to shareholders of AED 20 million in Q3 2022 compared to a net loss of AED 170 million in Q2 2022 underpinned by strong revenues.
- Third quarter net operating income (excluding one-off items) of AED 14 million compared to AED 6 million in Q2 2022, backed by strong recurring revenues across all segments while maintaining firm cost discipline across the Group.
- Cost to income ratio at 77% in Q3 2022 significantly lower than the 90% in Q2 2022. Expanding operating margins for the business in Q3 2022 driven by lower costs.
- Continued disciplined approach to deleveraging with debt-to-equity ratio at 124% in Q3 2022. Balance sheet metrics expected to improve in Q4 2022 driven by higher profitability and further reduction of leverage.
United Arab Emirates, 11 November 2022: SHUAA Capital psc (DFM: SHUAA), the leading asset management and investment banking platform in the region, has announced its financial results for Q3 2022. In the third quarter, SHUAA and its subsidiaries (the “Group”) reported a net profit attributable to shareholders of AED 20 million compared to a net loss of AED 170 million in the previous quarter. The Group reported a net operating income (excluding one-off items) of AED 14 million compared to AED 6 million in Q2 2022 as recurring revenues continue to build a stable moat and cost optimization measures taken earlier starting to improve profitability.
Further consolidation of recurring revenues and continued cost optimization initiatives
In the third quarter, SHUAA delivered another set of strong recurring revenues of AED 60 million across all business segments of the Group.
- The Group’s Asset Management segment delivered a healthy performance of AED 31 million of revenues, driven by the strong contribution from fee earning AuM within real estate as well as managed public and private market funds.
- The Group’s Investment Banking business reported revenues of AED 5 million due to higher advisory and trading income compared to the second quarter.
- Northacre recently announced project completion of The Broadway, a USD 1.5 billion+ contemporary residential and mixed-use development with unrivalled views across Westminster and St James’s Park in London.
- Revenues from our Corporate segment remained robust at AED 24 million amidst prolonged market volatility. In line with our strategy of divesting non-core assets, we expect revenues from the corporate segment to run off in the coming quarters.
- The cost-income ratio of 77% in Q3 2022 is significantly lower than the 90% in Q2 2022. Cost optimization initiatives are expected to continue with the cost-income ratio expected to meet management mid-term target of 65%.
Positioned to benefit from the GCC’s strong economic fundamentals and growth outlook
SHUAA is well positioned to benefit from the GCC’s positive economic outlook despite the weak global backdrop. The International Monetary Fund (IMF) projects that the Middle East will be one of the global growth outperformers in 2022. The UAE is forecast to grow 5.1% this year, while Saudi Arabia is expected to grow 7.6% in 2022, the fastest among the Fund’s main forecasts. Higher oil prices this year have led to GCC budgets running surpluses, strengthening sovereign balance sheets, and resulting in a surplus of capital being available for investment opportunities.
Commenting on SHUAA’s Q3 2022 results, Fawad Tariq Khan, Group Chief Executive Officer of SHUAA Capital, said: “Despite the prolonged global market volatility, our core operating business remained resilient and delivered another strong set of recurring revenues across all business segments. We remain committed to providing pioneering investment solutions to our clients, as evidenced by the project completion of The Broadway and the increase in the number of managed funds our clients have access to with the recent addition of USD 220 million in new AuM to our Discretionary Portfolio Management and funds in the third quarter of 2022.”
About SHUAA Capital psc
SHUAA Capital psc (DFM: SHUAA) is a leading asset management and investment banking platform. SHUAA Capital psc is recognized for its strong track record and pioneering approach to investing through a differentiated, innovative, and global product offering focused on public and private markets, debt, and real estate.
The asset management segment, one of the region’s largest, manages real estate funds and projects, investment portfolios and funds in the regional equities, fixed income, and credit markets; it also provides investment solutions to clients, with a focus on alternative investment strategies. The investment banking segment provides corporate finance advisory, transaction services, private placement, public offerings of equity and debt securities, while also creating market liquidity on OTC fixed income products. The firm is regulated as a financial investment company by the Securities and Commodities Authority.
