Dewa profit rises on expansion

Dewa’s revenue from its district cooling business rose by 78% year on year, reflecting the new revenue from Palm Utilities, acquired in November from Istithmar World for $300 million.

Dewa’s chief executive Saeed Al Tayer. Christopher Pike / The National

Dubai Electricity and Water Authority’s annual profit rose 12.7 per cent to Dh5.48 billion last year, benefiting from an increase in connections, the growth of its cooling business and cheaper financing.

The utility provider’s revenues grew last year to Dh17.8bn, an 8 per cent annual increase, according to a release posted on Nasdaq Dubai, where its bonds are listed. Dewa’s revenue from its district cooling business rose by 78 per cent year on year to Dh1.5bn, reflecting the new revenue from Palm Utilities, acquired in November from Istithmar World for $300 million.

The acquisition, completed in November 2013, made Dewa the world’s largest district cooling provider.

Dewa said that the total number of electricity and water connections in the emirate rose to 713,523 at the end of December, a year on year increase of four per cent.

The utility is set to further benefit from the rise in completed housing units in the emirates in the coming years. The property broker CBRE said in December that more than 20,000 new homes are expected to come on the market during the course of 2015, with as many as 65,000 new units to be delivered by 2017.

Dewa’s bottom line for the year was also boosted by a 32 per cent fall in financing costs compared with 2013.

The utility has enough cash on its books to repay a $1bn bond maturing in April, it said in a director’s report.

Dewa’s chief executive Saeed Al Tayer said on Monday that the utility was looking to establish local partnerships in the tourism sector and international community, with an announcement of these deals expected “soon”.

Dewa said last month that it was revising its targets for solar power upwards to account for 15 per cent of total capacity by 2030, up from 5 per cent previously, after falling costs associated with the technology.

The utility announced in December that it had approved a budget of Dh22.9bn for 2015, up from Dh20.6bn in 2014.

* With additional reporting from LeAnne Graves

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