Shuaa Capital reported results for the second quarter 2011. Despite challenging markets for the financial industry the second quarter results saw revenues increase to Dhs35.7m (2Q 2010: Dhs33.0m). The bottom line recovered to a net profit of Dhs0.6m up from a second quarter loss last year of Dhs56.6m and also up from the first quarter 2011 loss of Dhs26.3m.
Earnings per share were Dhs0.001, compared with a loss per share of Dhs0.053 in 2Q 2010. Book value at Dhs1.37 per share represents a substantial premium to the current share price levels of around Dhs1.00.
Sheikh Maktoum bin Hasher Al Maktoum, Chairman of Shuaa Capital, said, "In the last quarter, Shuaa Capital has been working hard to strengthen its existing business and improve its bottom line. The break even result in the second quarter gives us reason to be cautiously optimistic for the future but we realize that more work needs to be done. Our strong balance sheet places us in a strong position to weather the current market environment and take advantage of an upturn when it comes." Sameer Al Ansari, Chief Executive Officer of Shuaa Capital, commented, "The second quarter’s performance demonstrates that Shuaa has a more solid foundation. Asset Management, Finance and Private Equity reported a profit, while Brokerage and Investment Banking continue to suffer from subdued market activity. We further strengthened our balance sheet, ending the second quarter with Dhs1.9bn in assets, including Dhs412m in cash, against liabilities of Dhs422m. This gives us the flexibility to invest in organic as well as inorganic growth, playing a consolidator role when opportunities arise." Al Ansari said, "In the second quarter, we made further operational progress in some of our key business areas. The Asset Management business recorded a 48% increase in assets under management compared to the prior-year quarter. Finance generated Dhs138m of new business, a 133% increase on the comparable period in 2010." He added, "The conservative management decisions that we took early on to fix legacy issues, de-risk our balance sheet, and build a world class corporate governance framework, are helping us stand out as a credible partner for clients seeking financial stability in today’s turbulent environment. It is reasonable to expect that with an improvement in market conditions, we will generate further momentum with our clients, build market share and start executing investment banking mandates." Shuaa Capital maintained a strong balance sheet with a solid asset base and minimal debt. Total assets were Dhs1.9bn at the end of June 2011, including Dhs412m in cash, against total liabilities of Dhs422m. Total shareholder’s equity stands at Dhs1.5bn.
Non-core assets stood at Dhs397m, Dhs78.1m lower than at the end of the first quarter of 2011. This includes Dhs194.5m of investments in third party associates, Dhs19.2m of investment in third party funds, Dhs10.0m in equities, Dhs16.0m in bonds, Dhs149.4m of investments available for sale and 7.5 million of investments held to maturity.
Treasury deployed excess cash in the second quarter which included fixed income securities of Dhs59.1m and placed Dhs15.4m with Shuaa Asset Management to enhance yield.
Total investments in Shuaa managed funds increased by Dhs19.9m to Dhs204.8m up from Dhs184.9m in the first quarter 2011.
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