114 Airbus, 100 Boeing: Iran on a shopping spree?January 25, 2016 12:46
Dubai’s Shuaa Capital swings to small Q2 profit
Co posts 0.6 mln Q2 profit vs 56.6 mln loss in Q2 2010; Results aided by asset management business, cost cuts; Q2 includes 27.7 mln dirhams gains on other investments; Shares rise 5.3 percent in Dubai trade
July 26, 2011 11:26 by Reuters
Investment bank Shuaa Capital eked out a small second-quarter net profit on Tuesday, helped by aggressive cost cuts and strength in asset management business.
Shuaa, which took companies like port operator DP World to the market, posted a profit of 0.6 million dirhams for the second-quarter, compared with a loss of 56.6 million dirhams in the same period last year.
The results included a 27.7 million dirhams of gains on other investments and a seven percent reduction in total expenses to 62.8 million dirhams, it said in a statement to the bourse.
An HSBC analyst estimated that the company would post a loss of 29 million dirhams in the quarter, according to a poll by Reuters.
Shuaa’s second-quarter revenues stood at 35.7 million dirhams, up from 33 million in the comparable period a year ago.
The company, one of the Gulf Arab region’s largest investment banks, was hit hard by the global financial downturn as impairments related to troubled assets erased profits. Shuaa has been shedding risky assets from its investment portfolio after Dubai’s property crash and asset bubble.
Non-core assets stood at 397 million dirhams, 78.1 million dirhams lower than at the end of the first quarter, Shuaa said.
In the first quarter, Shuaa said it would cut 10.7 percent of its staff, or 39 jobs, to reduce costs following the regional turmoil which hit its quarterly results.
“It is reasonable to expect that with an improvement in market conditions, we will generate further momentum with our clients, build market share and start executing investment banking mandates,” said Sameer Al Ansari, chief executive of Shuaa Capital.
But the company said it saw strength in the second quarter, with its asset management business posting a 48 percent increase in asset under management to 959 million dirhams as compared with 649 million in the year-ago period. The segment posted a profit of 2.6 million dirhams compared with a loss of 8.8 million dirhams in the year-ago period.
Investment banking segment remains under pressure as Shuaa’s traditional strength of arranging initial public offerings have come to a virtual standstill in the region. That division posted a loss of 2.5 million dirhams in the second quarter, although narrower than the 2.8 million dirham loss it recorded in the same period in 2010.
In April, Shuaa said its Chief Financial Officer David Deards had resigned effective April 5.
Shuaa’s shares rose 5.3 percent to 1 dirham at 0710 GMT. They have lost 24 percent of its value so far this year. (Reporting by Shaheen Pasha, Editing by Dinesh Nair)