Tabreed’s third-quarter profit up 5.8% on higher revenue

Company seeks growth opportunities in India, Egypt, the UAE and Saudi Arabia, chief executive says

Tabreed's revenue in the third quarter jumped 8.7% a year to Dh595.7 million. Reuters

The National Central Cooling Company, better known as Tabreed, reported a 5.8 per cent increase in its third-quarter profit on the back of higher revenue.

The total profit attributable to equity holders of the parent company for the three-month period ending September 30 rose to Dh154.5million ($42.06m), Tabreed said in a statement to the Dubai Financial Market, where its shares are traded.

Revenue jumped 8.7 per cent a year to Dh595.7m during the period.

“The company experienced rapid and exceptional growth of its portfolio during 2020 and we are now seeing a real return on investment with steady, reliable and efficient performance across our networks,” said chief executive Khalid Al Marzooqi.

Tabreed will also be looking at growth opportunities in different markets including India, Egypt, the UAE and Saudi Arabia, Mr Al Marzooqi told The National in an interview.

“We are looking at brownfield or greenfield projects in both [Egypt and India] markets, in addition to the GCC markets,” he said.

India and Egypt "have huge potential for district cooling, whether [in] high-rise buildings, large campuses, data centres or shopping malls or universities. Both these markets are in need of district cooling as their environment constraints are increasing”.

A district cooling project in India might happen at the end of the fourth quarter while another project in Egypt is expected to start during the first quarter of next year, Mr Al Mazrooqi said.

The investment in both the markets is not expected to be large since the company is “just setting our footprint in that market and … it is going to be opening [a] door for us in that market”.

Tabreed currently owns and operates 84 plants across the GCC, including 75 in the UAE, three in Saudi Arabia, five in Oman and one in Bahrain.

In the UAE, the company is “looking at one large acquisition, which might be happening very soon”, he said, without disclosing full details about the new deal.

Tabreed has finalised a number of deals in the UAE over the past 12 months.

Earlier this year, it took full ownership of the operator of the district cooling unit that serves Al Maryah Island in Abu Dhabi after it bought an additional 50 per cent stake for Dh311.5m.

Tabreed also acquired an additional stake in Al Wajeez Development Company from its joint venture partner, Mubadala Infrastructure Partners, it announced in August.

It also bought a 80 per cent stake in Emaar’s Downtown Dubai district cooling network and also acquired Aldar’s Saadiyat Island plant and the Masdar City district cooling plant in Abu Dhabi to boost its portfolio.

The new deals will be funded through the company’s own money and any “financial tools that we might find ... competitive”, Mr Al Mazrooqi said.

Tabreed is also considering issuing bonds to raise money, depending on “how large the deal is”.

It plans to announce two large district cooling projects in Saudi Arabia, the Arab world’s largest economy, as it continues to expand its footprint in the region.

“We are excited about [the] Saudi market and the potential in the market is enormous," he said without disclosing further details.

Tabreed is also optimistic about revenue growth next year after economies continued to recover from the coronavirus pandemic.

"Despite all the challenges we had in 2020 ... Tabreed made great strides and did major acquisitions and we would like to continue that next year as well."