Jasim Alseddiqi
Excluding the impairment provisions, Shuaa Capital would have ended 2021 with a net profit of Dh227 million. Image Credit: Gulf News Archive

Dubai: Shuaa Capital recorded a net profit of Dh24 million in 2021, down 81 per cent from the Dh125 million for 2020.

This was brought on by a one-off charge of Dh203 million in the final quarter from valuation impairments. Shuaa had decided to speed up the restructuring of a ‘legacy, illiquid investment portfolio’.

If not for this, the like-for-like profit last year would have been Dh227 million.

“Our core revenues continue to show progress towards the high-quality revenues targeted within our strategy, with net fee and commission income up by 21 per cent year-on-year to Dh265 million in the year,” Shuaa said in a statement.

“Shuaa has continued to progress during the year in broadening its client offering,” said Jassim Alseddiqi, Group CEO. “As we move towards the end of cleaning up legacy and non-core investments and portfolios, we will increase our focus on driving revenues and shareholder returns whilst maintaining a strict discipline on costs.

Heavy deal flow

Shuaa has been active in on the deal-making side, notably seeing through the Arabic music stream platform Anghami to a Nasdaq New York listing this year. (This was the first by a regional tech entity on the US stock market.)

Recently, Shuaa took a majority in the price comparison platform Souqalmal, and on Tuesday (March 29) said it would be selling its interest in the Goldilocks fund to Abu Dhabi’s Eshraq Investments.

“We are continually looking for new ways to meet the demand from both existing and new clients and we remain confident about the numerous and long-term opportunities for our business which will create value for our shareholders,” the CEO added.

Two core focusses

Shuaa will focus on two core business lines - asset management and investment banking – even as it pares down assets held in its non-core unit. Following “progress in disposing of these assets, the non-core unit was closed in the fourth quarter of 2021 and the residual assets transferred to principal investments,” the company said in a statement.

“As well as the closure of the non-core unit, the Group restructured an illiquid, legacy portfolio absorbing the effects in the year.”

Fadhel Al Ali, Chairman of Shuaa Capital, said: “The model of partnering local capabilities has seen a number of high-profile successes in areas we can look to repeat this success, not least the investment banking team’s work on behalf of Anghami. We expect this model to continue to benefit both clients and shareholders in the future.”