Dubai's Shuaa Capital pivots to Q1 profit following restructuring
Dubai-listed Shuaa Capital PSC swung to a net profit of 196 million dirhams ($53 million) in Q1 2025 from a net loss of AED 94.73 million in the year-ago period following a period of restructuring and capital optimization.
The financial and investment services company made a net loss of AED 161 million in the preceding quarter.
Accumulated losses now stand at AED 932 million, 25.4% of capital. The losses stem from a host of factors, including investment impairment, receivables write-off, and valuation adjustments at its associate, Eshraq Investments.
Revenue was lower at AED 25 million versus AED 30.2 million in Q1 2024.
Cost to income ratio improved to 81% in Q1 2025, improving from 129% in the previous quarter.
Shuaa Capital's restructuring and capital optimisation strategies
included settlement with a major creditor to restructure AED 208 million in outstanding facilities, the conversion and issuance of mandatory convertible bonds (MCBs) totalling AED 274.4 million, which were converted into equity, impairment of legacy assets, and various cost-cutting measures.
Meanwhile Abu Dhabi-listed Eshraq Investment posted net loss of AED27 million for Q1, narrowing from a net loss of AED 306 million in the year-ago period. Eshraq is seeking to terminate its management agreement with Shuaa GMC after concerns about the valuation of the Goldilocks Fund.
The largest shareholder of Eshraq is Abu Dhabi Financial Group, which was combined with Dubai-listed Shuaa Capital in a reverse merger in 2019, and now holds 18.38% of Eshraq.
(Writing by Brinda Darasha; editing by Seban Scaria)
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