Tabreed’s 2021 profit jumps on higher revenue

District cooling company reports $159m in profit during the year

Tabreed's 2021 revenue jumped 12 per cent annually to Dh1.95 billion. Reuters

The National Central Cooling Company, better known as Tabreed, reported a 6 per cent increase in its 2021 profit on the back of higher revenue.

The total profit attributable to equity holders of the parent company for the full year climbed to Dh585 million ($159m), Tabreed said in a statement to the Dubai Financial Market, where its shares are traded. Revenue jumped 12 per cent annually to Dh1.95 billion.

The company's board recommended a dividend of Dh0.12 per share, to be paid in cash and through a bonus shares issue.

“Our prudent, strategy-led investment programmes continually produce numbers that prove Tabreed is on the right track,” said Tabreed’s chairman Khaled Al Qubaisi.

Last year, Tabreed formed a new holding company with World Bank's IFC to boost its India operations. Tabreed India will be transferred to a new, Singapore incorporated company, which is 75 per cent owned by Tabreed and 25 per cent by IFC.

The company will invest in projects of up to $400m over the next five years, aiming for a portfolio of approximately 100,000 refrigeration tonnes across India.

“Our partnership with IFC shows how serious we are to penetrate the Indian market,” Khalid Al Marzooqi, Tabreed’s chief executive told The National. “We are starting with $100m [in investment] and will grow up to $400m.”

India, Asia's third-largest economy, aims to become carbon neutral by 2070 and is putting emphasis on developing clean energy projects.

“We are in discussion on multiple projects. The goal is to finalise something this year,” Mr Al Marzooqi said.

The company is also bullish about growth opportunities in the UAE and across the region. It is looking at acquisitions as well as the expansion of its existing projects to boost its portfolio.

Tabreed will maintain a “growth trajectory of 9 per cent to 10 per cent this year”, Mr Al Marzooqi said. That will be driven by a combination of greenfield projects, mergers and acquisitions and international expansion.

The rise in oil prices and recovery of the UAE's property sector will also support the company's growth plans, he said.

The property market in the UAE, the second-biggest Arab economy, has recovered strongly from the pandemic-induced slowdown amid business reforms and government stimulus measures. Oil prices are also continuing to rise on the back of higher demand and supply constraints.

The growth in the real estate market “will definitely work for the benefit of Tabreed, especially in our concessions areas — be it in Saadiyat, Downtown Dubai, Al Maryah Island or Yas Island”, Mr Al Marzooqi said.

Tabreed currently owns and operates 86 district cooling plants across the GCC, including 75 in the UAE, three in Saudi Arabia, seven in Oman and one in Bahrain.

Last year, the company took full ownership of an 80,000 refrigeration tonnes capacity plant on Al Maryah Island in Abu Dhabi from its joint venture partner Mubadala Infrastructure Partners.

It also acquired a new district cooling plant in Oman last month from Al Mouj Muscat, a joint venture between the sultanate's government and UAE property developer Majid Al Futtaim.