x Abu Dhabi, UAEWednesday 24 January 2018

Clear run on profits for Tabreed

Focus on its chilled-water business and lower financing costs helped Tabreed's profits jump by 35 per cent in the third quarter.

Strong revenue from its chilled-water, district-cooling business helped to power Tabreed to a 35 per cent rise in profits in the third quarter of this year, compared with the same period last year.

Net profits rose to Dh73 million (US$19.8m), compared with a profit of Dh54.1m a year ago, the company said yesterday.

"Tabreed's strategy to grow its chilled water business continues to deliver strong financial results. I am pleased with our performance to date and expect us to finish the year strongly," said Waleed Al Mokarrab Al Muhairi, Tabreed's chairman.

Revenue for the quarter grew 5 per cent to Dh326.4m from Dh309.8m in the year earlier period.

Tabreed, which provides cooling systems to residential and commercial properties across the GCC, has moved its focus primarily to chilled water as it phases out other parts of its business, such as building insulated pipes.

Chilled-water revenue rose by 5 per cent to Dh747.6m in the first nine months of this year from Dh711.5m in the same period last year. Profits from chilled-water operations rose by 21 per cent to Dh255.9bn over the same period.

Although the company did not add any new capacity to its business during the period, it connected new plants during the quarter. A total of 17,769 refrigerated tonnes of customer connections were added in the quarter.

The firm has returned to growth after completing a refinancing in April last year of Dh2.63 billion in debt amassed during the property downturn.

Tabreed's financing costs have dropped as a result of the restructuring, falling by 26 per cent to Dh128.6m.

Spending cuts have also helped to strengthen the firm's bottom line. Tabreed now has 59 plants in the UAE, including 52 wholly owned and operated by the company and seven operated through its affiliates and subsidiaries.

The company has six more plants across Bahrain, Oman, Qatar and Saudi Arabia, which it operates through its affiliates and subsidiaries.

Tabreed shares fell 2.36 per cent to Dh1.24 in Dubai yesterday.

Last year's restructuring at Tabreed involved Mubadala Development, a strategic investment company owned by the Abu Dhabi Government, investing Dh3.1bn in the firm in return for a larger stake.

Mubadala now owns 27.3 per cent of Tabreed.