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SHUAA 2012 Results And Successful Strategy Execution In Line With Market Guidance
(10 February 2013)

 

Full Year 2012 highlights:

- Total Revenues up 38% to AED137.3 m from AED99.3 m in FY 2011
- Total Expenses reduced by AED163.0 m, a 45% improvement, to AED199.3 m from AED362.3 m in FY 2011
- Net Loss improved by 80% to AED59.0 m, a reduction of AED234.8 m on prior year
- Lending and Asset Management were profitable in 2012
- Cost/Income Ratio was 138% an improvement of 43% year-on-year

Fourth Quarter 2012 highlights:

- Total Revenues increase of 25% to AED25.2 m from AED20.1 m in Q4 2011
- Total Expenses reduced by AED100.1 m to AED39.2m from AED139.3 m, a 72% improvement
- Net loss reduction of 81% to AED20.7 m compared to a net loss of AED111.9 m in Q4 2011

Balance Sheet highlights:

- Total Assets of AED1.4 bn were AED231.1 m lower than in December 2011
- Cash and Deposits with Banks, up 24% to AED423.3 m from AED340.2 m
- Total Liabilities reduced by AED167.8 m to AED269.4 m, down 38% from AED437.2m
- Bank borrowings stood at AED136.3 m, down from AED275.9 m
- Total Shareholder’s Equity reduced by AED63.4 m to AED1.1 bn
- Book Value per Share is AED1.04

Achievements:
- Gulf Finance awarded "Best SME Finance Company" at the Banker Middle East Industry Awards, recognizing its SME financing activities for the second consecutive year
- SHUAA Asset Management received "Best Asset Manager in the UAE" award from EMEA Finance magazine for the third consecutive year
- SHUAA Asset Management’s Emirates Gateway Fund voted "UAE Equity Fund of the Year" by MENA Fund Manager for the second year in a row

SHUAA ended the year 2012 with a strong balance sheet and liquidity, considerably improved its bottom line result and regained its standing in the regional financial services industry. The net loss for 2012 was AED59.0 m, an 80% improvement on 2011’s AED293.8 m loss. This result is within the forecast range that SHUAA communicated in October 2012. The improvement was driven primarily by the successful completion of the restructuring and rightsizing programme. Total expenses for the year were reduced by AED163.0 m. General and Administrative expenses were down AED37.7 m as the number of staff was reduced and processes made more efficient. The Lending business recorded a AED13.7 m expenses increase in line with its expansion plans in the UAE and Saudi Arabia. All other business units recorded a significant decrease of expenses totalling AED51.4 m. This
represents a year-on-year improvement of 29%.

During the first half of 2012, SHUAA incurred charges related to the Company’s restructuring programme, which only started to have a positive impact on General and Administrative expenses during the second half of 2012. The full impact of the 2012 restructuring programme is expected to be recognized in 2013 with an additional cost improvement of 10%.

Revenues for Q4 2012 were AED25.2 m compared to AED20.1 m for Q4 2011, representing an increase of 25% and bringing 2012 annual revenues to a total of AED137.3 m, a 38% increase over 2011 revenues of AED99.3 m. Revenues were buoyed by an increase in interest income and a positive swing in investments in SHUAA’ managed funds.

In the fourth quarter 2012, SHUAA achieved its strategic and financial objectives. The fourth quarter net loss improved to AED20.7 m from a loss of AED111.9 m in the same period last year with the benefits of the rightsizing programme showing a positive impact on the Company’s bottom line. SHUAA continues to prudently value its assets and as such there were no investment impairments in the period.

SHUAA further strengthened its balance sheet. As at 31 December 2012, total assets stood at AED1.4 bn. Cash and deposits rose 24% to AED423.3 m. Throughout the year, the Company continued to reduce liabilities by retiring debt. Total liabilities consequently fell by 38% to AED269.4 m from AED437.2 m at the end of 2011, lowering interest expenses by 28 % to AED11.7 m from AED16.2 m in 2011.

HH Sheikh Maktoum Hasher Al Maktoum, Executive Chairman of SHUAA Capital, commented onthe results:

"Despite the volatile market environment in 2012, SHUAA’s financial results for the full year are in line with our market guidance. Strategically, 2012 was a transformational year for SHUAA and the business achieved key milestones in its announced restructuring programme. We successfully completed four major turnaround initiatives, including the rightsizing programme, the reduction in non-core assets, the transformation of our
industry leading balance sheet by strengthening our liquidity position and the announcement of a clear strategic, financial and operational roadmap with a focus onrecurring revenue generation.

The reduced scale of our industry and the renewed need for capital and advisory expertise are playing out in our favour. While most of the regional financial services industry is still in restructuring mode, SHUAA now has a competitive advantage and the ability to focus on revenue generation. The recent revitalization of our financial brand nd the positive feedback on our strategic direction from shareholders and clients underscore our position of strength versus peers. SHUAA is now in a unique position to focus on growth which will result in a stronger performance in 2013."

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