Dubai: Shuaa Capital said on Sunday its group profit for the first quarter to March fell even as revenues rose a tad.
Group profit fell to Dh11.7 million in the March quarter from Dh24.8 million in the prior year. Net profits fell due to lower interest income from its lending arm, as a result of aggressive de-leveraging in bank debt in the company’s lending subsidiary, Gulf Finance Corporation.
Group revenues rose to Dh33.2 million in the first three months to March, from Dh31.8 million.
“The last 12 months has seen aggressive de-leveraging of our business with Dh159 million bank term debt repaid from internally generated cash flows. Our core operations are welding well under the long-term strategy set last year,” Fawad Tariq Khan, chief executive of Shuaa Capital, said in a statement.
Bank debt fell to Dh87 million from Dh248 million in the same quarter last year, with term debt due to be fully re-paid during the second quarter, demonstrating strong operating cash flows.
Shuaa’s asset management unit jumped 204 per cent to Dh4.1 million. The unit’s revenues rose 56 per cent to Dh8.9 million.
The investment banking division’s revenues stood ground at Dh0.7 million, compared to Dh0.7 million in the first quarter of last year. However, the loss narrowed to Dh0.6 million in the first three months from Dh0.8 million in the year before period.
Outlook
“During [the] second quarter we will also begin consolidating the operations of both Integrated Securities and Integrated Capital as well as other acquisitions in the pipeline that will allow Shuaa to continue its path towards sustainable profitability,” Khan said.
As of March 31, Shuaa’s balance sheet and total assets stood at Dh1.3 billion, up from Dh1.2 billion in 2017. Net assets stood at Dh869.2 million and the group’s liquidity position was healthy, with Dh94.1 million in cash and cash equivalents.
