Source: Khaleej Times

Date: 18/6/2002

Shuaa Capital earns Dh1.1m net profit

UAE investment firm Shuaa Capital has achieved an operating net profit of Dh 1.1 million following the fall in the shares of international, regional and local IT companies which required a provision of Dh4.8 million from the operating net profit of Dh 5.8 million during the financial year ending Mrach 2002. This was announced at the company's annual general meeting on Sunday.

Addressing the AGM, Shuaa Capital's Chairman Majid Saif Al Ghurair, said "Inspite of the global economic slowdown that negatively affected the performance of the Arab economy in general, Shuaa Capital has made concrete progress that will allow the company to flourish in the future."

"The financial results of the company don't always reflect the real progress achieved through the development of human resources and the initiation of new projects and investments funds," he said. Shuaa Capital increased its revenues from Dh13.7 million to Dh31.6 million in 2000. Total consolidated assets went up by 30 per cent to Dh530 million despite the unfavourable global and regional economic conditions, Al Ghurair pointed out.

"We have recently concluded the acquisition of 55 per cent stake in the Gulf Finance Corporation, a licensed finance company, in addition to acquiring 50 per cent of the UAE's premier brokerage house, Emirates Commercial Centre," he said. "I'm quite confident that the current strategic plan, which aims at diversifying the sources of the company's income to include advisory services and fund management has been successful in its first year. The fees collected from these two activities increased by 280 per cent to reach Dh 6 million in 2001, there was equally impressive increase of 241 per cent in client funds under management reaching Dh 251 million this year.

Iyad Duwaji, Shuaa Capital's Chief Executive Officer, said, " We recently launched two new investment funds, Al Thiqa Fund which is focusing on UAE equities and open to all investors including non-UAE nationals, and the Arab Income Fund, (TAIF), which focused primarily on Arab fixed income securities and targeted primarily towards financial institutions and insurance companies.

Shuaa Capital was very much aware of the fact that last year was a difficult period for investment banking and financial services companies world wide, added Duwaji. The volatility of the financial markets impacted the company's expected returns from its private equity portfolios, he added.

"The global economic slowdown has diminished the value of international, regional and local IT companies, which required a provision of Dh4.5 million from the operating profit, therefore Shuaa Capital will end the year with a net profit of Dh1.1 million."

Iyad said that 50 per cent of the company's investments are in the AGCC countries and 33 per cent are in the other Arab countries, namely Egypt, Jordan with the remaining 17 per cent invested in Europe and United States. We try our best to equally balance between fixed income securities, publicly traded equities and private equity investments," said Duwaji.