Shuaa eyes acquisitions as 2016 losses cut by 30%
dubai — Shuaa Capital on Monday said it is actively looking at acquisitions as the group’s year-on-year losses reduced by 30 per cent to Dh132.5 million last year due to stringent cost control measures.
Dubai investment bank, which is ‘virtually unleveraged’, will consider leverage options as the turnaround in the group’s operations is expected this year, its chairman Jassim Alseddiqi said at a news conference in Dubai on Monday.
The lender said its full year revenues stood at Dh173.8 million last year compared to Dh178.2 million in 2015. It’s fourth-quarter revenue dropped to Dh35.1 million from Dh40.1 million in the same period of 2015 while losses reduced significantly from Dh161.8 million to Dh18.9 million.
Incurred losses came predominantly from the group’s lending business Gulf Finance, whereby provisions of Dh150.1 million were set aside against bad loans for the full year 2016. The lending division registered Dh110.0 million in losses compared to Dh119.9 million in 2015, according to the statement.
“We enter 2017 on a positive note. The company faced difficulties throughout the year. However, as the new board of directors take helm, we expect a turnaround year in 2017,” said Alseddiqi, who is also the chief of Abu Dhabi Financial Group that bought a 48.36 per cent stake in Shuaa Capital last November.
Shuaa’s balance sheet and total assets at year-end stands at Dh1.3 billion last year compared to Dh1.6 billion in 2015. The group’s liquidity position is strong with Dh346.6 million in cash. Liabilities decreased to Dh474.7 million from Dh638.6 million in 2015. As of December 2016, net assets stood at Dh825.8 million while the leverage ratio was 0.45 at year-end.
“Our business lines capitalised on several opportunities during the year. We were part of a successful set of companies that colaunched Nasdaq Dubai’s Futures Market, having been the exclusive market markers. Our real estate hospitality funds and projects in Saudi Arabia and Dubai also received new interest as we handed over our first hotel in Saudi Arabia and participated in the launch of another one in Dubai,” said Alseddiqi.
Operating expenses remained stable at Dh167.4 million last year compared to Dh164.3 million in 2015 while general and administrative expenses for the year were reduced by a further 2.9 per cent from Dh130.6 million to Dh126.8 million.
— business@khaleejtimes.com