E a r n i n g s P r e s e n t a t i o n

F Y 2 0 2 2

23 March 2023

© 2023 SHUAA Capital psc. All rights reserved

Executive Summary

Financial Measures

Key Metrics

Group

Updates

  • Full year operating income (excluding carry expense) continues to show progress at AED 17 million in 2022, driven by firm cost optimization measures across the group and recurring revenues.
  • The Group reported a net loss of AED 135 million in full year 2022 compared to a net profit of AED 24 million in the previous year.
  • The result included one-timenon-cash charges attributed to mark-to-market losses in our managed funds and accelerated amortization of intangible assets.
  • Stable operating margins for the business in 2022 at ~10% mainly due to cost efficiencies.
  • The cost-income ratio of 93% in 2022 is 6% lower than 2021 despite an 18% drop in revenues highlighting the reduction in operational leverage of the business through cost optimization.
  • Revenue enhancing initiatives are set to continue with the cost-income ratio expected to meet management medium-term target of 65%.
  • The Group's continued focus on deleveraging panned out with the Debt-to-Equity ratio improving to 105% in 2022 from 134% in 2021. AED 169m of debt repayments made during FY 22.
  • Real Estate: In Q4 2022 we have proudly announced the partnership with Ellington Properties and Sol Properties to develop a prime waterfront property on Palm Jumeirah.
  • Asset Management: In Q4 2022, we launched three new Shariah-compliant funds, bringing the ICC umbrella Funds to five with assets under management (AuM) at USD 230 million.
  • Corporate: Expense base stabilizing in 2023 with ~AED 100m of reductions through disposal of assets and cost efficiencies from 2022 (Vs. AED 248m in FY2022) and significantly simplified balance sheet via AED 2b of asset + AED 1.7b of liability deconsolidation in last 24 months.

Key Financial Highlights FY 2022

FY 2022 Financial Performance

Income Statement (AED Mn)

% Change

% Change

FY 2022

FY 2021

vs. FY 21

Q4-22

Q3-22

vs. Q3-22

Net Fee and Commission Revenue

251.1

295.7

(15%)

45.9

68.4

(33%)

Other Revenue

14.7

27.0

(46%)

5.1

(0.4)

-

Total Revenues

265.7

322.7

(18%)

51.0

68.1

(25%)

Operating Expenses (excl. carry

(248.4)

(281.1)

12%

(38.6)

(65.2)

41%

expense)

Net Operating Income (excl. Carry

17.4

41.6

(58%)

12.4

2.9

334%

expense)

Commentary

Net operating income of AED 17 million

underpinned by cost efficiencies and strong

recurring revenues in FY 2022

§ FY 2022 net loss of AED 135 million

compared to AED 24 million of net profit

in 2021. 2022 results included AED 83

Carry Expense

Net Operating Income/(Loss)

Other Income/(Expenses)

Profit/(loss) from discontinued operations and Disposal of Subs

Non-Controlling Interests

Net Profit/(Loss) 1

EBITDA 2

Key Metrics

Operating Margin (%) excl. one-off items and carry expense

CIR (%)

Balance Sheet (AED Mn)

Total Assets

Total Debt

Total Equity

Key Metrics

Debt to Equity

Return on Equity - Parent

(5.5)

(10.4)

-

(0.2)

-

-

11.8

31.2

(62%)

12.2

2.9

327%

(1.7)

(178.0)

-

(24.5)

125.4

-

(132.6)

217.8

-

2.1

(47.9)

-

(12.7)

(46.7)

-

19.4

(60.3)

-

(135.2)

24.2

-

9.2

19.9

(54%)

135.0

(54.7)

-

38.6

102.1

-

7%

13%

(6%)

24%

4%

20%

93%

87%

6%

76%

96%

(20%)

% Change

% Change

FY 2022

FY 2021

vs. FY 21

Q4-22

Q3-22

vs. Q3-22

3,476

5,768

(40%)

3,476

3,766

(8%)

1,594

2,474

36%

1,594

1,940

18%

1,520

1,846

(18%)

1,520

1,566

(3%)

1.05x

1.34x

29%

1.05x

1.24x

19%

(10%)

2%

(12%)

(3%)

(3%)

0%

million of one-off charges mainly taken

to simplify the business.

§

Cost to income ratio at 93% in 2022 lower

than 2021 due to drop in revenues

partially offset by cost efficiencies.

§

Stable operating margins for the

business in 2022 driven by cost

efficiencies.

Balance sheet metrics on upward trajectory

  • Continued disciplined approach to deleveraging with debt-to-equity ratio at 105% in FY22 compared to 134% in FY21

1 Net Profit attributable to shareholders

3 2 Excludes results for discontinued operations

Revenue Breakdown

Quarter-on-Quarter & Year-on-Year Revenues

Commentary

AEDm

Asset Management

Investment Banking

Corporate

82

68

12

13

32

57

5

31

51

3

2

46

323

82

29

211

(57)

-18%

266

103

16

147

Recurring revenues continue to contribute

significantly with improved business momentum

across all segments

  • Asset management continues to support recurring revenues driven by the strong contribution from real estate management income
  • Investment banking revenues lower in Q4 as a result of cyclicality and timing of deal closures
  • Corporate revenues robust in Q4 2022 amidst prolonged market volatility

Q4-21

Q3-22

Q4-22

FY21

FY22

4

Asset Management Segment Performance

Asset Management Revenues

AEDm

Real Estate

Public Markets

Private Markets

Debt

211

11

6

68

147

5

19

31

57

46

125

1

31

92

27

7

3

10

28

7

28

20

Q4-21

Q3-22

Q4-22

FY 21

FY 22

EBITDA

19

2

29

109

(11)

Net

11

(4)

24

71

(39)

Profit

Commentary

Posting healthy Q4 2022 results driven by the contribution from recurring real estate revenues coupled with resilient fee performance from managed public & private market funds

Real Estate:

  • Continued contribution from recurring revenue and management fees
  • New project launched in Q3 2022

Public Markets:

  • Robust fee performance in managed funds

Private Markets:

  • Resilient recurring management fee revenues

Debt:

  • Stable recurring management fee revenues

5

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Disclaimer

SHUAA Capital PSC published this content on 22 March 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 23 March 2023 09:02:01 UTC.