SHUAA Capital progressing with potential combination with ADFG; releases Q1 2019 earnings

SHUAA Capital confirms it is progressing with its potential transaction with ADFG through a strategic investment structure where-in the combined entity will continue to operate as a publicly listed company. The Company is going through final stages before regulatory and shareholder approvals will be sought.

SHUAA Capital today announces its Q1 2019 financial results, with revenues increasing to AED 55.4 million (Q1 2018: AED 33.2 million). The Company however reported a AED 24.9 million net loss (Q1 2018: profit AED 11.7 million) on the back of certain one-off provisions and a change in accounting standards.

Fawad Tariq-Khan, Chief Executive of SHUAA Capital, said: “The first quarter for SHUAA reflects mixed results of the business. Our core operating businesses of investment banking, capital markets and asset management continued to grow in profitability, while certain one-off provisions and higher financing costs dragged our overall results into a loss. That said, our continued growth in our core operations continues our strategy of solidifying our recurring revenue base taking us towards sustained long-term profitability.”

The quarter saw SHUAA’s Capital Markets division registering profits worth AED 2.7 million (Q1 2018: loss AED 1.7 million), with the Investment Banking division registering AED 1.1 million in profits (Q1 2018: loss AED 0.6 million). Asset Management recorded AED 3.1 million of losses (Q1 2018: profit AED 4.1 million) driven by a one-off impairment of AED 4.2 million in its business following a change in revenue recognition standards for performance fees. The Lending division recorded AED 4.4 million in losses (Q1 2018: profit 2.2 million), while Corporate reported a loss of AED 21.2 million (Q1 2018: profit AED 7.7 million) due to provisions relating to its legacy investment in an Abraaj-controlled fund and higher financing costs.

As of March 31, 2019, SHUAA’s balance sheet and total assets was AED 2.2 billion (December 31, 2018: AED 2.1 billion). The Group’s liquidity position was strong with AED 572.7 million in cash and net assets of AED 790.2 million attributable to the shareholders.