SHUAA Capital, the region’s leading financial services institution, today reports results for the first quarter ended 30 June 2008. The results reflect SHUAA’s robust business model and solid market positioning across its businesses.
First quarter operating income reached AED 176.6 million, up 64.0% on the last quarter (Q4 2007/08: AED 107.7 million) and up 21.9% from the same period a year earlier (Q1 2007/08: AED 144.9 million).
First quarter net profit attributable to SHUAA shareholders stood at AED 67.1 million, up 13.9% on the last quarter (Q4 2007/08: AED 58.9 million) and down 10.0% from the same period last year (Q1 2007/08: AED 74.5 million).
Mr. Iyad Duwaji, Chief Executive Officer of SHUAA Capital said “I am pleased with our overall performance given difficult market conditions regionally and globally. We remain confident that fiscal 2008 will be another successful year for SHUAA Capital. Although the performance during the first quarter partially reflected the poor performance and unusual volatility in capital markets, our annuity fee business generated the second strongest quarter in the company’s history.”
In comparison to the first quarter last year, SHUAA Capital’s annuity fee business recorded significant growth of 73.1% to AED 119.5 million (Q1 2007/08: AED 69.0 million). SHUAA Asset Management contributed a substantial portion of this result.
Reaching their highest level ever, assets under management of SHUAA Asset Management increased by 121.8% year on year to AED 6.7 billion (Q1 2007/08: AED 3.0 billion), and grew 37.0% over the last quarter (Q4 2007/08: AED 4.9 billion).
While SHUAA continues to invest in the future growth of the company, net profits were primarily offset by difficult market conditions affecting the principal investment division and by the substantial increase in personnel expenses, which were driven by a sharp rise in number of staff, as well as performance related benefits. SHUAA grew its headcount by 93.8% to 498 at the end of June 2008 from 257 last year.
Mr. Kerim Mitri, Deputy CEO of SHUAA Capital added: “Our diversified and balanced business model helped us maintain solid operating income growth and deliver a sizeable net profit. SHUAA’s capital position is strong and we have deployed resources to invest in high-margin, high-profit businesses while we control our growth efficiently across regional markets. We also remain confident that the GCC will continue to serve as a safe haven for smart investors – both foreign and domestic.”
SHUAA Capital’s total client’s funds under management increased by 110.6% to AED 15.6 billion (30 June 2007: AED 7.4 billion) year on year. This reflects the continued demand from regional and, increasingly, international investors for its products and services, primarily asset management, brokerage services, and private equity investments.
Corporate Highlights
In May 2008, Moody’s Investor Service assigned a long-term issuer rating of Baa2 to SHUAA Capital with a stable outlook. The short-term issuer rating on SHUAA is Prime-3. The rating reflected SHUAA’s solid track record as one of the few leading, regional investment banking and securities firms in the GCC, its robust capitalization, its solid brand recognition and reputation, its strong financial performance despite very volatile markets, ample liquidity and satisfactory operating diversification.
In June 2008, Euromoney awarded SHUAA Capital ‘Best Equity House in the Middle East’ and ‘Best Equity House in the UAE’ being the first institution to receive both awards in the same year. SHUAA also received the Euromoney Award for “Best Equity House in the UAE” in 2004 and 2007.
In June 2008, SHUAA Capital Saudi Arabia and Rotana Hotel Management Corporation signed a master agreement to develop hotel properties in Saudi Arabia through the US$533 million SHUAA Saudi Hospitality Fund I. The SHUAA Saudi Hospitality Fund I is a Shari’a compliant closed-end fund which aims to develop and own seventeen hotel properties, furnished apartments, and resorts across the Kingdom of Saudi Arabia comprising 5,000 rooms.
At the Extraordinary and Ordinary General Assembly held on 17 June 2008, shareholders approved the distribution of a cash dividend of 45% of the nominal value of shares, corresponding to AED 0.45 per share with settlement on 29 June 2008. Shareholders also agreed to amend the company’s articles of association allowing GCC nationals to be treated as UAE nationals in relation to owning, dealing with and disposing of shares of the Company (which became effective on 15 July 2008). The delisting of SHUAA’s shares from the Kuwait Stock Exchange was also approved during the meeting.
