SHUAA Capital Faces Challenges Amid Accumulated Losses
SHUAA Capital PSC, a leading financial institution in the UAE, reports significant accumulated losses due to various impairments and market conditions.
Summary
SHUAA Capital PSC has reported accumulated losses of AED 1.13 billion for FY 2024, primarily due to impairments and valuation adjustments. Despite these challenges, the company's diversified portfolio and strategic initiatives offer a positive outlook.
SHUAA Capital PSC, a prominent asset management and investment banking firm based in the United Arab Emirates, has reported AED 1.13 billion in accumulated losses for the fiscal year 2024. This represents a 44.47% accumulated losses to capital ratio, a significant figure that has raised eyebrows within the financial community.
The losses have been attributed to several key factors. Firstly, fair value losses due to impairments on investments, goodwill, and receivable write-offs associated with the company's UK investments have had a substantial impact. Additionally, impairments and receivable write-offs related to legacy real estate assets have further contributed to the financial strain.
Another factor is the losses arising from the company’s associate due to valuation adjustments of its underlying assets. Furthermore, the recognition of a deferred tax liability due to the implementation of corporate tax law in the UAE has also played a role in the accumulated losses.
The company has also faced receivables write-offs associated with a revision of land valuation in the UAE, as well as fair value losses from investments in public market securities and managed investments. Moreover, the accrued coupon related to the outstanding USD 150 million bonds issued by an affiliated special purpose vehicle (SPV) has added to the financial burden.
Despite these challenges, SHUAA Capital remains a resilient player in the financial industry. The company’s diversified portfolio, which spans public and private markets, debt, and real estate, continues to offer opportunities for growth and recovery. SHUAA's strategic initiatives and innovative approach to investing could potentially help them navigate through these turbulent times.
Investors should keep a close eye on SHUAA Capital's next moves. The company’s ability to adapt and respond to market conditions will be crucial in determining its future trajectory. Given the current circumstances, a hold recommendation is prudent for investors, allowing them to monitor developments before making any decisive moves.
Source
Summary
SHUAA Capital psc reported accumulated losses of AED 1.13 billion for the fiscal year 2024, resulting in an accumulated losses to capital ratio of 44.47%. The losses were primarily due to several factors, including fair value losses from impairments of investments and goodwill, write-offs of receivables linked to UK investments, impairments and write-offs related to legacy real estate assets, valuation adjustments of a company associate's underlying asset, and the recognition of a deferred tax liability following the implementation of corporate tax law in the UAE. Additional losses stemmed from receivables write-offs due to revised land valuations in the UAE, fair value losses from investments in public market securities and managed investments, and accrued coupon related to USD 150 million bonds issued by an affiliated special purpose vehicle.
