Tecom Group, the operator of business districts in Dubai, recorded a 54 per cent annual surge in net profit in the second quarter on “continued buoyancy” in the emirate's economy.
Profit for the three months that ended in June rose to Dh237 million ($64.5m), compared with Dh153.9m during the same period last year, Tecom said in a statement on Wednesday to the Dubai Financial Market (DFM), where its shares are traded.
Tecom, which made its stock market debut on the DFM on July 5 after raising Dh1.7 billion from its initial public offering, also reported a more than 18 per cent rise in revenue for the second quarter to Dh504m.
For the first half of 2022, net profit climbed more than 43 per cent to Dh427.5m, while revenue rose nearly 16 per cent to Dh989.4m.
The company attributed its profit growth to a sustained increase in occupancy rates on the back of “continued buoyancy in Dubai’s economy and improving business sentiment”.
“Our strong performance in the first half of the year builds on our solid performance in 2021 and underscores the strength of our well-balanced business model and the resilience of our diversified portfolio of quality, strategically located assets and value-added services,” Abdulla Belhoul, chief executive of Tecom Group, said.
The results also came on the back of the “constructive demand-supply dynamics of the commercial and industrial real estate market” in Dubai, he said.
Dubai's economy has recovered strongly from the Covid-19 pandemic-induced slowdown.
The emirate's economy grew 6.3 per cent in the first nine months of 2021, according to preliminary data from the Dubai Statistics Centre. Emirates NBD, Dubai's biggest bank, estimates that it grew about 5.5 per cent for the full year 2021 — an increase from its earlier forecast of 4 per cent.
Business activity in Dubai's non-oil private sector economy also improved at the quickest pace in three years in June, as new orders rose sharply despite inflationary pressures.
The headline seasonally adjusted S&P Global UAE Purchasing Managers' Index rose to 56.1 in June from 55.7 in May to its highest reading since June 2019.
Economic growth in the emirate has also supported the real estate market, with prices rebounding since last year.
At the end of the first six months of 2022, the consolidated occupancy level at Tecom's operating assets was 82 per cent, up from 78 per cent at the end of December 2021, “reflecting positive business sentiment”, the company said.
Earnings before interest, taxes, depreciation and amortisation for the first six months of 2022 rose 22.4 per cent annually to Dh722.8m on the growth of its top line and enhanced operational efficiencies across all business segments.
“We are optimistic in our ability to sustain a steady increase in our occupancy levels and high customer retention levels for the upcoming period. This will add further stability to our revenue and cash flow for the midterm,” Mr Belhoul said.
“Furthermore, our well-defined strategy for growth will enable us to take advantage of a broad spectrum of growth drivers from secular trends pertaining to each of the six vital sectors we cater to,” he said, referring to the group's clusters of technology, media, education, science, design and manufacturing.
Tecom's portfolio consists of Dubai Internet City, Dubai Outsource City, Dubai Media City, Dubai Studio City, Dubai Production City, Dubai International Academic City, Dubai Knowledge Park, Dubai Science Park, Consists of Dubai Design District and Dubai Industrial City.
The group has more than 7,800 customers in Dubai and provides real estate solutions across commercial, land and industrial segments.