Tabreed's Q2 net profit climbs on Downtown Dubai asset acquisition
The power utility company also reported a 13% rise in its first-half net income
Tabreed, in which France's Engie and Abu Dhabi's Mubadala Investment Company hold stakes, reported a 19 per cent increase in its second-quarter net profit that was driven by the acquisition of the Downtown Dubai district cooling business.
Net profit attributable to equity holders of the parent for the three months ending June 30 grew to Dh142.1 million, the company said in a statement on Sunday to the Dubai Financial Market, where its shares trade.
“Tabreed has established a leading position in the district cooling industry, with a clear vision to deliver consistent and sustainable results to investors and shareholders,” Bader Al Lamki, Tabreed’s chief executive, said.
“Moving forward, we remain well-positioned to continue to capture growth opportunities despite the unprecedented global pandemic.”
Revenue for the period grew by 11 per cent year on year to Dh415.65m.
Direct costs widened to Dh214.55m at the end of June, from Dh186.89 from a year earlier.
Tabreed bought a majority stake in Emaar Properties’ Downtown Dubai district cooling business for Dh2.48 billion in April. The deal, financed through a corporate loan, gave Tabreed an 80 per cent stake in one of the biggest district cooling businesses while Emaar retained the remaining stake as part of a long-term partnership with Tabreed.
The long-term concession will exclusively provide up to 235,000 refrigeration tonnes of cooling to the development, the companies said in a joint statement to the DFM at the time.
Tabreed has the ability and appetite for more deals such as the Emaar district cooling agreement and the company has a healthy pipeline of deal flow, acquisition targets and schemes it intends to invest in, its chairman, Khaled Al Qubaisi said in April.
“We’re focusing on existing projects and we’re looking at acquiring some of the existing schemes,” he told Bloomberg at the time. “We still have enough firepower to do a few more in the coming few years.”
In January, the company bought cooling plants in Masdar City and said it will explore the development of large-scale cooling plants in Sharjah through a venture with environmental management company Bee'ah.
In May, Mr Al Lamki said the company did not expect the coronavirus pandemic to have a “significant impact” on its businesses and that Tabreed is well placed to ride out the economic volatility as it looks for long-term growth opportunities.
"We are taking whatever actions are required in our liquidity and we are very much in a position to navigate this period with minimum impact,” he said at the time.
For the first six months of the year, Tabreed's net profit grew by 13 per cent to Dh224.3m from a year ago.
Group revenue for the first half of the year increased by 6 per cent to Dh710m, including a 7 per cent rise in the company’s core chilled water revenue to Dh681.17m.
Earnings before interest, taxes, depreciation and amortisation increased by 8 per cent to Dh438.8m.
However, Tabreed’s share of results of associates and joint ventures decreased 42 per cent to 23.3m, the company said without giving a reason.
Tabreed has operations in the UAE, Saudi Arabia, Bahrain, Qatar and Oman.
It provides district cooling to developments such as the Dubai Metro and Ferrari World in the UAE, Bahrain’s financial centre and the Jabal Omar Development in Saudi Arabia.
Updated: July 26, 2020 02:53 PM