The National Central Cooling Company, better known as Tabreed, reported a 10.5 per cent rise in third-quarter revenue, driven by new connections and higher demand from existing customers.
Revenue for three months to the end of September rose to Dh755.39 million ($205.6 million), the company said in a filing on Wednesday to the Dubai Financial Market, where its shares are traded.
However, Tabreed reported a net loss attributable to equity holders of the parent company of Dh101.26 million for the third quarter, compared with a net profit Dh159.25 million in the same period last year, as it recorded an income tax expense of Dh358.79 million.
The deferred tax liability is related to the nine per cent corporate income tax that would apply to Tabreed from the start of 2024, Adel Al Wahedi, Tabreed's chief financial Officer told The National.
“This is not related to the company's performance by any means, whether operationally or financially. It is a pure non-cash [and] non-performance accounting treatment,” he said.
The UAE, the Arab world's second-largest income, introduced federal corporate tax this year that levies a headline nine per cent rate on taxable income exceeding Dh375,000.
The company's net profit in the first nine months of the year fell to Dh285.14 million from Dh399.6 million in the same period last year.
Revenue during the period rose about 10 per cent to Dh1.82 billion.
“Tabreed continued to capitalise on its regional presence, growing rapidly and strategically across its core markets, domestically in the UAE and regionally across GCC and Asia,” said Khaled Al Qubaisi, Tabreed’s chairman.
“Our new projects and capacity additions throughout the period continue to demonstrate the attractiveness of district cooling in Tabreed’s key markets.”
Tabreed, one of the largest utility companies in the Middle East, has been rapidly expanding its operations across the region to grow operations.
The company said it delivered an additional 41,319 refrigeration tonnes in the first nine months of 2023 through new cooling plants in Abu Dhabi, Saudi Arabia, and an acquisition from Tata Realty in India.
Tabreed, which operates 89 district cooling plants across the UAE and the GCC, said it was still on track to add 120,000 refrigeration tonnes this year.
In September, Tabreed signed a preliminary agreement to explore development and investment opportunities in district cooling infrastructure in the southern Indian city of Hyderabad.
The cooling infrastructure will have the potential to reduce more than 200 megawatts of peak electricity demand, resulting in an annual carbon dioxide emissions reduction of 600,000 tonnes, Tabreed said.
“We are working out all the paperwork to finalise that concession agreement with the government,” said Khalid Al Marzooqi, Tabreed's chief executive.
The project will be expanded in phases as cooling demand rises and is expected to reach a total concession load of 125,000 refrigeration tonnes.
The company is optimistic about growth in India and is looking at acquisitions and greenfield projects to expand.
In 2021, the company formed a holding company with the World Bank’s International Finance Corporation to invest up to $400 million over the next five years for its expansion in India.
Mr Al Marzooqi said Tabreed would look at expanding further in Asia, a region where cooling demand is expected to increase in the next few years amid growing urbanisation and economic development.
“Everything is under our microscope … If you reached India, there's no point in stopping just in India.”
In August, Adnoc and Tabreed announced the first project in the Gulf region that harnesses geothermal energy.
The hot water generated by the heat from the wells will pass through an absorption cooling system to produce chilled water, which will then be supplied to Tabreed’s district cooling network at Masdar City, meeting 10 per cent of the hub’s cooling needs.
“We are at the stage of commissioning of the plant. Within a day or two, it will be up and running,” said Mr Al Marzooqi.
“That will be the first plant in the region, which will be providing cooling simply by using geothermal heat.”