Shuaa FY20 profit grows 168pc to AED125 mn

BBN Report

Board recommends 3 pc cash dividend

DUBAI/ March 10-2021: Shuaa Capital, the leading asset management and investment banking platform in the region, has reported net profit of AED125 million for 2020 (FY20), up 168 per cent year on year, with continued strong EBITDA generation that increased to AED349 million, up 89 per cent year on year.

Shuaa Group, along with its subsidiaries, has made headway in its strategic agenda of increasing recurring revenue through permanent capital vehicles, whereas its assets under management increased to a record $14.1 billion at the year end.

The group achieved a Return of Equity (ROE) of 8.5 per cent for FY2020, in line with the medium-term target previously communicated of an ROE between 7-12 per cent.

Dividend at 3 pc

Thanks to the performance, the Board has recommended payment of the first dividend to shareholders since the merger in 2019, of 3 fils per share totalling AED76 million.

Financial and operational foundations strengthened Shuaa to successfully complete its 2020 funding plan with the issuance of the first high yield bond issuance in the MENA region since the outbreak of the COVID-19 pandemic, in October.

The $150 million bond issuance, which saw strong uptake, especially from institutional investors, has helped optimise the Group’s funding and balance sheet structure as the Group continues to focus on deleveraging in line with its targets.

This issuance will underpin the Group’s financial foundations for future growth. Meanwhile, the transformation of the Group’s business post-merger took a considerable step forward in the year, with non-core unit (NCU) net assets more than halving from AED306 million at the start of 2020 to AED136 million by the end of 2020.

From an operational perspective, the Group’s integration and transformation programme continues to progress. In particular, the Group-wide Enterprise Resource Planning (ERP) system, launched in Q4 2020, will optimise the Group’s internal processes and facilitate operational efficiencies.

This was a key step in Shuaa’s integral and phased digital transformation programme, which supports the strategy of scaling its platform, operating more efficiently and improving decision-making capabilities.

New funds

As part of the Group’s planned build-up of permanent capital in the asset management segment, 2020 saw Shuaa launch a number of new funds.

In September, SHUAA launched the Shuaa Financing Opportunities Fund, its first dedicated financing fund focused on Sharia-compliant opportunities in the GCC.

Fadhel Al Ali, Chairman of Shuaa Capital said the company has risen admirably to the challenges of 2020 and delivered a strong performance.

“We have remained focused on realising our growth strategy and the results are clearly evident in our FY 2020 performance, including our ability to pay our first dividend post-merger,” Al Ali said.

Jassim Alseddiqi (seen in the picture), Group Chief Executive Officer (CEO) of Shuaa Capital, said, “When we set out our growth strategy this time last year, the global pandemic had yet to unfold. Nevertheless, it is testament to the resilience of our business – and our people – that we have continued to execute against our strategy in the face of exceptional circumstances.”

 

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