Tabreed reports first-quarter profit rise on the back of lower costs

Net profit climbs 3% to Dh82.2m despite a 1% fall in revenue

Tabreed's cooling plant on Yas Island in Abu Dhabi. The company reported a 3 per cent rise in first-quarter net profit. Victor Besa / The National 

Tabreed, in which France's Engie and Abu Dhabi's Mubadala Investment Company hold stakes, reported a 3 per cent rise in first-quarter net profit on the back of a reduction in costs.

Net profit attributable to equity holders of the parent for the three months ending March 31 climbed to Dh82.2 million, the company said in a statement to Dubai Financial Market, where its shares trade. However, revenue during the period dropped 1 per cent to Dh294.3m. Direct costs fell 3 per cent to Dh131m.

“Tabreed’s first-quarter financial results demonstrate the resilience of our operational capabilities, proving that we are still able to deliver essential, efficient and reliable services to our customers as we collectively navigate through these challenging times,” said Khaled Abdulla Al Qubaisi, Tabreed’s chairman.

“Facilities are 100 per cent operational and we are taking all possible measures to ensure we maintain this service level" while putting the necessary health and safety measures for staff and external contractors in place, he added.

"Operations are continuing normally and demand is constant especially in summer months. We don't see a significant impact on our business," chief executive Bader Al Lamki told The National.

Administrative and other expenses rose 12 per cent to Dh58.3m “mainly from a provision of Dh10m on receivables due to impact of Covid-19, offset by cost savings.”

Finance costs dropped 5.7 per cent to Dh42.8m due to lower interest rates.

Total assets rose 27 per cent from the end of last year to Dh11.4 billion by the end of March and liabilities by 65 per cent to Dh6.6bn.

Tabreed currently operates 83 district cooling plants in the UAE, Saudi Arabia, Bahrain, Qatar and Oman. It provides district cooling to developments such as the Dubai Metro and Ferrari World in the UAE; Bahrain’s financial centre and the Jabal Omar Development at Makkah in Saudi Arabia.

Last month, the company bought a majority stake in Emaar Properties’ Downtown Dubai district cooling business for Dh2.48bn. In January, the company bought cooling plants in Masdar City and said it will explore the development of large-scale cooling plants in Sharjah through a venture with environmental management company Bee'ah.

“We are always looking for opportunities to grow our business either through greenfield projects or acquisitions. We will continue to have an appetite,” Mr Al Lamki said.

The company is continuing to weigh up opportunities in other parts of the Gulf, Egypt and India, he added.

Tabreed is also consolidating a number of service offerings to set up a new entity, Tabreed Energy Services, offering consultancy services, as well as operation and maintenance of cooling plants.

Moody's Investors Service affirmed the Baa3 long-term issuer rating of Tabreed and also its Baa3 instrument rating on the company's senior unsecured sukuk certificates following the deal with Emaar.