Shuaa Capital's 2021 profit dips on one-off charges

The company’s operating income rose 11% to $107.3m

Jassim Alseddiqi, group chief executive of Shuaa Capital, said he is confident about the long-term opportunities for the business. Victor Besa / The National

Dubai-based investment bank Shuaa Capital reported a 68 per cent drop in net profit last year as the earnings were impacted due to the one-off charges.

The company’s net profit dipped to Dh40 million ($10.8m), down from Dh125m in 2020.

The result included one-off charges of net Dh189m related to the valuation impairments following the decision to accelerate the restructuring of a legacy, illiquid investment portfolio, the company said in a statement on Monday.

It added that net profit on a like for like basis would have been Dh229m last year.

“As we draw an end to cleaning up legacy and non-core investments and portfolios, our focus is now solely on driving revenues and shareholder returns … [while] maintaining a strict discipline on costs,” Jassim Alseddiqi, group chief executive of Shuaa Capital, said.

Shuaa’s earnings before interest, taxes, depreciation and amortisation (Ebitda) declined 33.4 per cent on an annual basis to Dh233m last year and stood at Dh422m adjusted for net one-off items.

The company’s operating income rose 11 per cent annually to Dh394m. The net fee and commission income increased by 21 per cent year-on-year to Dh265m.

Shuaa said its expenses remained under control with operating expenses up 6 per cent yearly to Dh315m, as a result of targeted strategic hiring across the business.

“We remain confident about the numerous and long-term opportunities for our business,” Mr Alseddiqi said.

“We are excited about finding new ways to grow our business and differentiate our offerings. I am optimistic that with our enhanced team and capabilities and new offering, Shuaa is now poised to deliver accelerated growth,” he added.

Shuaa led, invested in and concluded transactions worth more than Dh1.8 billion last year. These included the debt buyout of Stanford Marine Group for Dh1.13bn, which secured 1,800 jobs and millions of dollars in vessel exports.

It also developed and expanded its capabilities and strengthen its client offering. This included hiring new world-class teams for real estate investment and client coverage, driving a 33 per cent increase in core headcount, Shuaa said.