Jasim Thabet, the chief executive of Tabreed, which is expanding operations in Qatar. Fatima Al Marzooqi / The National
Jasim Thabet, the chief executive of Tabreed, which is expanding operations in Qatar. Fatima Al Marzooqi / The National

Business

UAE firm has goal to keep football fans cool at Fifa World Cup in Qatar

Tabreed is looking to provide an answer to the most vexing challenge of the 2022 Fifa World Cup: how to keep more than 1 million football fans cool.

Lucy Barnard

February 04, 2013

Tabreed is hoping to provide an answer to the most vexing challenge of the 2022 Fifa World Cup in Qatar - how to keep more than 1 million football fans cool.

The UAE's largest district cooling company, which reported a 29 per cent leap in full-year profits yesterday, is expanding operations in Qatar and has the world's biggest sporting event in its sights.

It already operates three plants in the country through its Qatar Cool joint venture and is one of the companies negotiating with Qatar Cool to supply cooling for the football tournament.

Tabreed, which supplies chilled water to housing and office blocks for use in air-conditioning systems, said yesterday that net profit surged to Dh236.3 million (US$64.3m) last year as the company, which was hard hit by the global financial downturn, concentrated on efficiency savings.

"The GCC is growing and when it grows, Tabreed and district cooling will grow with it," said Jasim Thabet, the chief executive. "We expect to grow, particularly in Qatar and Saudi Arabia in terms of new plants and connections."

Two years ago the company completed a Dh3.1 billion refinancing deal with Mubadala Development, a strategic investment company owned by the Abu Dhabi Government. Sales were almost flat, rising from Dh1.11bn to Dh1.12bn. Net finance costs decreased by 18 per cent to Dh176.7m.

Profits from Tabreed's core chilled-water business increased 27 per cent to Dh347.1m as sales gained 7 per cent to Dh1.01bn.

During the year, the company wound down or sold off some of its unprofitable units. It hopes to boost profits further by using treated waste water, rather than desalinated water, in its pipes. The company also wants to sell district cooling services to older buildings that are centrally cooled.

After a Dh1.1bn loss in 2009 and the completion of its refinancing deal with Mubadala, Tabreed said it was in good shape to acquire existing district cooling plants owned by rivals.

"Cooling is a really vital part of the infrastructure in the region. It's not like we're selling something that is an option," said Mr Thabet.

The specs

Engine: 3-litre twin-turbo V6

Power: 400hp

Torque: 475Nm

Transmission: 9-speed automatic

Price: From Dh215,900

On sale: Now

The Brutalist

Director: Brady Corbet

Stars: Adrien Brody, Felicity Jones, Guy Pearce, Joe Alwyn

Rating: 3.5/5

Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
 
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
 
Round 3: February 7-9, Dubai Autodrome – Dubai
 
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
 
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia

World ranking (at month’s end)
Jan - 257
Feb - 198
Mar - 159
Apr - 161
May - 159
Jun – 162
Currently: 88

Year-end rank since turning pro
2016 - 279
2015 - 185
2014 - 143
2013 - 63
2012 - 384
2011 - 883

2025 Fifa Club World Cup groups

Group A: Palmeiras, Porto, Al Ahly, Inter Miami.

Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.

Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.

Group D: Flamengo, ES Tunis, Chelsea, Leon.

Group E: River Plate, Urawa, Monterrey, Inter Milan.

Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.

Group G: Manchester City, Wydad, Al Ain, Juventus.

Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.

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While you're here
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”