SHUAA Capital announces financial results for the first half of 2024 and the progress towards finalizing its capital optimization plans

United Arab Emirates, 14 August 2024: SHUAA Capital psc (DFM: SHUAA) the leading asset management and investment banking platform in the region, has released its financial results for the first half of 2024.

SHUAA Capital reported an adjusted net operating loss of AED 2 million in the first half of 2024, a favourable improvement of AED 5 million compared to the previous year. On a quarter-over-quarter basis, the Group has continued to reduce losses, reporting a net loss attributable to shareholders of the company of AED 29.5 million in the second quarter of 2024, compared to AED 87.2 million in the first quarter of 2024. Additionally, the company’s
operating margin increased notably by 8% compared to the prior year due to cost efficiencies beginning to permeate through the bottom line.

During the first half of the year, SHUAA continued its balance sheet optimization efforts, including valuation adjustments related to underlying assets of an associate and impairments of legacy investments in the UK. Management views these impairments as a necessary step in the company’s capital optimization journey, facilitating a right-sized balance sheet and establishing a lean and efficient capital structure.

As previously announced, SHUAA Capital reached an agreement with bondholders in April 2024 to amend and extend the agreement till 31 March 2025 aimed to reduce the company’s leverage by over AED 500 million. To facilitate this, SHUAA Capital has engaged advisors to satisfy the regulatory requirements associated with the issuance of mandatory convertible bonds (MCBs). The company intends to complete this process before the end of 2024, subject to the required regulatory and shareholder approvals.

The company is now better positioned for business growth by increasing its asset under management, securing new mandates and deepening engagement with both existing and new clients. It also continues to attract new talents across all business verticals, while strengthening relationships with creditors and key stakeholders. SHUAA Capital will also benefit from its increased ownership in Eshraq, now exceeding 25% both directly and indirectly, as a result of the capital reduction through the cancellation of treasury shares.

Wafik Ben Mansour, Group CEO of SHUAA Capital, said: “I am pleased with what we have accomplished in the first half of this year, thanks to the dedication of our board of directors and management team.

SHUAA’s robust platform and solid operating performance have been overshadowed by the accumulation of underperforming principal investments in recent years. Looking ahead, we will refocus on our core financial services business, delivering exceptional service and innovative products to our valued clients and the community, as we have done for the past 45 years.

I am fully committed to successfully completing our capital optimization plan and laying a new foundation for sustained growth and value creation.”