Shuaa Capital, the Dubai-based investment bank, on Thursday posted a second-quarter net loss as the company continued its restructuring efforts and booked one-off costs associated with the process.
The company posted a net loss of Dh15.9 million for the three months to June 30, compared with a Dh0.6 million profit in the same period last year as investment income declined. Revenues dropped to Dh22.2million from Dh 35.7 million for the same period last year. Shuaa added most of its restructuring efforts, plus the booking of one-off costs associated with it, had been completed in the second quarter and the benefits of this programme would begin to show through from the third quarter onwards.
In a statement, the company said its first-half revenues grew to Dh77.2 million from Dh62.8 million in the same period last year, a 23 per cent improvement. The net loss reduced to Dh24.4 million, from a loss of Dh 25.7 million.
“We have significantly reduced the overall running costs to a rational level while maintaining our operational integrity. We look forward to sharing the next phase of our strategy by the end of the current quarter,” said Shaikh Maktoum Hasher Al Maktoum, executive chairman of Shuaa Capital.
“Shuaa’s balance sheet remains strong with total assets of Dh1.5 billion. The company retains a healthy cash balance of Dh272 million at the period end, down from Dh345 million at the 31 March 2012 reflecting the further repayment of loans. Net debt currently stands at Dh194.0 million as compared to a Dh251.3 million at the end of June 2011. Shuaa retains a strong liquidity position going forward,” the statement said.
Shuaa, which has gone through several top-level management changes post the 2008 financial crisis, named in April Colin MacDonald, a former ABN Amro banker, as its new chief executive, replacing Michael Philipp.
The firm has laid-off more than a third of its staff in the last year, the statement said. The majority of the redundancies related to the retail brokerage business, which Shuaa exited after slumping trade volumes in the UAE.
One of the Arab world’s largest investment banks and once a symbol of the sector’s potential in the region, Shuaa is slowly recovering from the 2008 global financial downturn.
The company, which helped float ports operator DP World several years ago, jointly lead-managed the initial public offering of UAE healthcare provider NMC Health on the London Stock Exchange earlier this year.
In May, Shuaa Capital said it aimed to trim costs by an additional 14 per cent by the end of the first half as the investment bank eyes a recovery from an economic downturn and a return to profitability.
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