UAE's Tabreed posts 61% rise in first-half profit amid expansion

District cooling company said new customer connections were added in the UAE, Saudi Arabia, Bahrain and Oman

Tabreed's cooling plant in Abu Dhabi. The utility has been rapidly expanding its operations across the region. Photo: Tabreed

The National Central Cooling Company, better known as Tabreed, reported an almost 61 per cent rise in its first-half net income as revenue rose on the back of new customer connections as it continues to expand operations.

Net profit attributable to equity holders of the parent company for the six months to the end of June rose to Dh386.4 million ($105.28 million), the company said in a filing to the Dubai Financial Market, where its shares are traded.

Group revenue for the first six months of the year climbed 9.4 per cent on an annual basis to Dh1.07 billion.

Profit from operations at the end of June rose by 5 per cent to Dh394.2 million as 33,483 refrigeration tonnes (RT) of new customer connections were added during the reporting period in markets including the UAE, Saudi Arabia, Bahrain and Oman.

“Following last year’s strong performance, Tabreed is delighted to report further growth in revenue and profits, year on year, for the first half of 2023,” its chairman Khaled Al Qubaisi said.

“The addition of new capacity across the GCC and the launch of our first cooling services in India is not only supplying our growing international customer base with efficient and reliable cooling, but also having a significant impact on preventing carbon emissions.”

Tabreed, one of the largest utility companies in the Middle East, has been rapidly expanding its operations across the region to boost operations.

The company’s total connected capacity reached 1.3 million RTs during the reporting period as it commissioned three new plants – one in the UAE and two in Saudi Arabia.

It owns and operates 89 district cooling plants across the GCC, including 75 in the UAE, five in Saudi Arabia, seven in Oman and one in Bahrain, in addition to other international projects and operations.

In May, the company said it was investing Dh44.34 million in an information technology park in northern India amid its global expansion efforts.

Tabreed is acquiring the existing cooling infrastructure at Tata Realty’s Intellion Park development in Gurugram. The initial value of the transaction will be Dh9.4 billion, it said in a filing to the DFM at the time.

In 2021, the company formed a new holding company with the World Bank’s International Finance Corporation to invest up to $400 million in the next five years for the purpose of its expansion in India.

However, it is “not in a hurry” to expand its presence in India, one of the fastest-growing economies in the world, according to its chief financial officer.

Tabreed has to take into account the profile and creditworthiness of potential clients before exploring partnerships, Adel Al Wahedi told The National in an interview.

The company, which is a shareholder in Saudi Tabreed, said the acquisition of a 30 per cent stake by sovereign wealth fund Public Investment Fund will support its growth.

The kingdom's market alone could alone produce more RTs than the rest of Tabreed's portfolio as the country builds multibillion dollar mega-projects over the decade to help overhaul its economy, Mr Al Wahedi said.

“We consider that we have the right local partners in Saudi Arabia, where they can facilitate and push for growth … we're very optimistic about that.”

Tabreed has also expanded its portfolio of assets at home. It bought a majority stake in Emaar Properties' Downtown Dubai district cooling business for Dh2.48 billion in 2020.

The same year, it bought two district cooling units on Saadiyat Island, in Abu Dhabi, from Aldar Properties in a Dh963 million deal to boost its asset base in the UAE.

Last year, the company increased the foreign ownership limit of its shares to 100 per cent, from 49 per cent.