SHUAA Capital (SHUAA) Q2 2024 earnings summary

Executive summary

• Net loss to owners of the parent was AED 117m–126m in H1 2024, compared to net income of AED 9m–20m in H1 2023, mainly due to legacy investment impairments.

• Adjusted operating income for H1 2024 improved by AED 5.5m year-over-year after normalizing for one-off revenues, driven by cost reductions.

• Accumulated losses reached AED 945m as of 30 June 2024.

• Breach of covenants on a bilateral facility led to AED 208m loan classified as current liability.

• Agreement reached to extend AED 509m bond settlement to 31 March 2025, with plans for mandatory convertible bonds and AED 367m equity raise.

Financial highlights

• H1 2024 total revenues: AED 50.1m, down from AED 62.9m–97.5m in H1 2023 (normalized for one-offs).

• Operating expenses (excl. one-offs) fell to AED 51.6m in H1 2024 from AED 69.8m in H1 2023.

• Operating loss of AED 5.3m in H1 2024, compared to operating income of AED 40.9m in H1 2023.

• Total assets at 30 June 2024: AED 1,375m–1,380m, down from AED 1,720m at year-end 2023.

• Earnings per share for H1 2024 was negative AED 0.05, compared to AED 0.01 in H1 2023.

Outlook and guidance

• Management plans further cost optimization and revenue-enhancing initiatives once the capital optimization plan is enacted.

• Mandatory convertible bond offering expected before end-2024, aiming to convert at least 50% of bonds to equity and settle the rest at an 80% discount.

• Plans to raise up to AED 367m in equity capital to partially repay non-converting bondholders.