DUBAI: Shuaa Capital has said that “strong growth’ in its Saudi Arabia and Egypt business has contributed to a 21 percent rise in its second quarter profits, according to a Dubai Stock Exchange filing.
Profits rose to 14.6 million dirhams ($4 million) compared to 12.1 million dirhams recorded in the same time period last year.
“Our Egypt and Saudi businesses in particular have achieved a strong growth trajectory, and more importantly, given our strong liquidity position and recent recoveries, we are now in a position to look at making dividend distributions to our shareholders for the first time in ten years,” said Fawad Tariq-Khan, CEO of Shuaa Capital, said.
Shuaa’s asset management arm which oversees the development of real estate projects in both the UAE and Saudi Arabia more than doubled its profits in the second quarter to reach 4.6 million dirhams.
The division is close to the final stages of completing a new hospitality building in Dammam, while work continues on a second multi-purpose residential complex, the Wadi Al Hada project, in Riyadh, the company said.
During this quarter, Shuua signed a preliminary agreement with Saudi real estate developer Jabal Omar Development Company to jointly manage real estate investment funds in the Kingdom.
Jabal Omar’s existing flagship development is in Makkah, just walking distance from the Grand Mosque. Set to be delivered in phases, the project covers two square-kilometers and will feature high-rise towers, apartments, residential units and shopping malls.
Shuaa’s improved fortunes in the second quarter compare to the decline in total profits recorded in the first quarter, which the company blamed on lower lower interest income from its lending arm following a reduction in bank debt at its lending subsidiary, Gulf Finance Corporation.
Profits declined to 11.7 million dirhams ($3.2 million) compared to 24.8 million dirhams in the first quarter of 2017, according to a filing on the DFM on May 7.
In the second quarter’s results, the lending division which comprises of Gulf Finance Corporate UAE and its Shariah-compliant sister company Gulf Finance Saudi Arabia, posted profits of 4.4 million dirhams, compared to a loss of 10.1 million dirhams in the second quarter last year.
Shuaa’s board of directors have decided to recommend to pay an interim dividend to shareholders. This is in addition to the share buyback previously announced in June.
