Shuaa Q4 revenues up 58%
Dubai - Firm counts on asset management unit to drive growth
Shuaa Capital on Saturday declared a 58 per cent increase in fourth quarter revenues but its full year revenues declined by more than 16 per cent for 2015, citing difficult market conditions in the wake of lower oil prices.
Revenues for the full year stood at Dh178.2 million compared to Dh213.4 million in 2014, and the company posted an overall loss of Dh190.3 million compared to Dh25.8 million profit in 2014.
For the fourth quarter of 2015, the company reported revenues of Dh40.1 million, representing a 58 per cent increase compared to Dh25.4 million in Q4 2014, and a loss of Dh161.8 million (Q4 2014: loss of Dh14.8 million).
"The difficult market conditions driven by the decline in oil prices, global economic instability and continued political uncertainty in the region witnessed during the course of 2015 created a challenging operating environment for Shuaa's business units, particularly in the second half of the year," said Abdul Rahman Hareb Rashed Al Hareb, chairman of Shuaa Capital.
"We are currently working on a number of initiatives that we are confident will enhance Shuaa's performance in 2016," the chairman informed.
The majority of the loss recorded in 2015 is attributable to Gulf Finance, the SME lending business, which set aside provisions of Dh154.6 million against bad loans. Despite this, the business increased full year revenues by 21 per cent to Dh159.7 million (2014: Dh131.5 million) and continues to see strong demand for its financing products, particularly in the Saudi Arabia division, where SMEs have historically experienced difficulty in accessing growth finance.
Despite volatile market conditions in 2015, Shuaa maintained its balance sheet. Total assets at year-end stood at Dh1.6 billion (2014: Dh1.6 billion). The group's liquidity position remains strong with Dh263 million in cash. Liabilities increased to Dh639 million from Dh459 million in 2014, principally due to additional financing support for the SME lending business. As of December 31, 2015, net assets stood at Dh961 million while the leverage ratio was 0.47 at the year end.
Al Hareb added: "Looking ahead, some of the key growth areas we see in 2016 include our asset management division, which has performed well in 2015 despite challenging markets and has a number of new product launches in the pipeline."
Asset management reported full year revenues of Dh15.8 million (2014: Dh26.4 million) and a profit of Dh10.3 million (2014: Dh20.7 million). The division is currently working on a number of new products that are expected to launch in the coming six months.
Gulf Finance UAE and Gulf Finance Saudi Arabia reported a 21 per cent increase in revenue to Dh159.7 million (2014: Dh131.5 million), and an overall loss of Dh119.9 million (2014: profit of Dh33.4 million) for the full year 2015.
Shuaa's investment banking division reported full year revenues of Dh7.1 million (2014: Dh18.9 million) and a loss of Dh1.9 million (2014: profit of Dh11.8 million).
Full year revenues for capital markets division reduced to Dh6.2 million (2014: Dh12.3 million) and an overall loss of Dh5.6 million (2014: profit of Dh5.7 million) was posted. The result was due to poor market performance and low trading volumes in comparison to 2014 which created a challenging operating environment for the division.