Tabreed Q3 net profit climbs 13% amid challenging market

The district cooling company's revenue surged 20% to Dh548m in the three months to the end of September

Tabreed's third quarter profit rose 13% on higher revenue. Victor Besa / The National

The National Central Cooling Company, also known as Tabreed, reported a 13 per cent increase in third-quarter net profit, driven by “resilience and agility” in a tough operating market.

Net profit attributable to equity holders of the parent for the three months to the end of September grew to Dh146 million ($40m) from the year-earlier period, the company said in a statement to the Dubai Financial Market, where its shares trade.

“Tabreed remains well positioned from an operational and capital perspective despite the uncertainties and challenges brought on by this year’s events, as reflected by the resilient and strong performance of our businesses," chief executive Bader Al Lamki said.

"In turn, we are making progress on executing on our long-term plans, including investing in infrastructure, and deploying capital in attractive long-term opportunities."

Revenue for the period increased 20 per cent annually to Dh548m from the same period a year ago, the district cooling provider, in which France’s Engie and Abu Dhabi’s Mubadala Investment Company hold stakes, said.

In October, Tabreed gained approval from shareholders to raise up to $1 billion through the issuance of bonds or sukuk to fund acquisitions, as well as for general corporate purposes.

Shareholders authorised the board to issue bonds or sukuk in one or more tranches over the next 12 months.

It subsequently raised $500m with a seven-year, 2.5 per cent coupon bond issuance. The issuance was oversubscribed almost five times at its initial size of $400m.

Net profit in the first nine months increased 13 per cent to Dh370m from the year-earlier period, while revenue jumped 12 per cent to Dh1.3bn.

In April, Tabreed bought a majority stake in Emaar Properties’ Downtown Dubai district cooling business for Dh2.48bn. The deal, financed through a corporate loan, gave Tabreed an 80 per cent stake, with Emaar retaining the balance under a long-term partnership deal.

In January, the company bought cooling plants in Masdar City. It is exploring the development of large-scale cooling plants in Sharjah through a joint venture with environmental management company Bee’ah.

Tabreed has 83 district cooling plants, and operates in the UAE, Saudi Arabia, Bahrain, Qatar and Oman.

It provides district cooling to developments such as Burj Khalifa, the Sheikh Zayed Grand Mosque,    Dubai Metro and Ferrari World in the UAE, Bahrain’s financial centre and the Jabal Omar Development in Saudi Arabia.