SHUAA Capital (SHUAA) Q1 2025 earnings summary

Executive summary

• Net income reached AED 196 million in Q1 2025, reversing a Q4 2024 net loss of AED 161 million and a Q1 2024 net loss of AED 95 million, reflecting a successful turnaround strategy and capital optimization.

• Revenues rose to AED 26 million in Q1 2025 from AED 17 million in Q4 2024, with a 46% year-over-year increase and all business segments contributing.

• Major capital restructuring completed, including conversion and issuance of mandatory convertible bonds (MCBs) and settlement of existing bonds at a discount.

• Accumulated losses reduced to AED 932 million as of March 31, 2025, from AED 1,128 million at year-end 2024.

• Operating income improved to AED 5 million from a net operating loss of AED 5 million in the previous quarter.

Financial highlights

• Total revenues for Q1 2025 were AED 25.7 million, up from AED 17 million in Q4 2024, mainly from investment banking.

• Net profit (core) was AED 1 million, compared to a loss of AED 18 million in Q4 2024.

• Operating expenses fell by AED 2 million due to lower staff costs.

• Cost-to-income ratio improved to 81% from 129% in Q4 2024.

• Equity rose to AED 571 million from AED 15 million in Q4 2024.

Outlook and guidance

• Management targets a cost-to-income ratio of 65% for FY 2025, leveraging ongoing revenue and cost optimization.

• Board assessed going concern based on operational profitability, liquidity, and forecasted cash flows for the next 12 months.

• Ongoing negotiations with lenders for restructuring a term loan after covenant breaches, with a one-year waiver secured.

• Continued focus on reducing debt and managing liabilities through refinancing and settlements.