SHUAA Capital announces first quarter financial results for 2024 and progresses towards finalizing capital optimization plans

United Arab Emirates, 16 July 2024: SHUAA Capital psc (DFM: SHUAA) the leading asset management and investment banking platform in the region, has released its first quarter financial results for 2024 and has facilitated the resumption of trading in the company’s shares. 

SHUAA Capital reported adjusted net operating income of AED 5 million, a significant improvement compared to the AED 14 million loss reported in prior quarter. The operating margin for the quarter was 16%, a stark improvement compared to  the negative 29% reported in the prior quarter, highlighting the growing operational strength of the business as cost efficiencies begin to permeate through the bottom line. 

During the first quarter 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.

SHUAA also reached an agreement with bondholders in April 2024, aiming to reduce debt by over AED 500 million, thereby strengthening the company’s equity base. The company is now focused on completing the necessary regulatory steps to issue Mandatory Convertible Bonds (MCBs) and expects to finalize the capital optimization plans by the end of 2024.

SHUAA has embarked on transforming its business model. The Company’s new integrated model will focus on Asset Management and Investment Banking, bolstered by a robust Sales and Distribution platform. These actions are anticipated to lead to a more sustainable profit profile and enhance shareholder value. The Company has also announced changes in key senior roles, including the permanent appointment of Wafik Ben Mansour as Chief Executive Officer (CEO), and the hiring of Roberta Calarese as Chief Legal Officer (CLO), in addition to other senior
appointments. The Board also nominated Ahmed Alahmadi to act as Managing Director (MD) of SHUAA for a period of one year.

Wafik Ben Mansour, Group CEO of SHUAA Capital, said: “The company is starting to turn a corner by taking a proactive stance towards its legacy investments, bolstering its capital base and laying the foundation for a new business model focused on growth and shareholder value. I continue to remain optimistic about the company’s strong fundamentals and future direction, along with the dedicated support of the newly appointed Board Members under the leadership of our Chairman. We will continue to provide regular progress updates on our capital optimization journey, while we focus on transforming our business model and implementing our new strategy. We also anticipate releasing our reviewed financials for the second quarter of 2024 within the set regulatory deadline.”