Tabreed, the Abu Dhabi based district cooling company, reported a 15 per cent profit rise in the first quarter as the company focused on chilled water and stripped away more of its non-core business.
Net profits reached Dh36.8 million (US$10m), up from Dh31.9m in the first quarter of the year, the firm said yesterday.
"Our performance in the first quarter builds upon last year's achievements in establishing Tabreed as a stable utility business," said Waleed Al Muhairi, Tabreed's chairman.
"I am pleased Tabreed recorded increased operating and net profit while delivering on its strategy of focusing on its core chilled water business."
The firm's chilled water revenue reached Dh193.2m during the quarter, up five per cent from the same period of last year. Chilled water profits from operations rose by 29 per cent to Dh73.2m.
Meanwhile, the firm continued to phase out non-core parts of its business such as building insulated pipes. As a result, group revenue dropped by 11 per cent to Dh219m.
The firm is returning to a sustainable position after refinancing Dh2.63bn in debt in April, as part of a restructuring of debt build up during the property downturn. The restructuring involved Mubadala Development, a strategic investment firm owned by the Abu Dhabi Government, investing Dh3.1bn in the firm in return for a larger stake in the firm. Mubadala now controls 27.3 per cent of Tabreed.
The restructuring has helped to bring down Tabreed's financing costs. The firm also attributes its improved performance to cost controls.
"Due to our continued cost control and improved organisational efficiencies, operating costs declined 25 per cent and operating profit increased 14 per cent compared to the same period last year," said Sujit Parhar, Tabreed's chief executive.
Tabreed generated new revenue during the quarter from the completion of a chilled water plant in Ajman with a capacity of 10,000 refrigerated tonnes. It took the group's installed capacity across the region to 759,125 refrigerated tonnes. A total of 597,325 refrigerated tonnes of that amount is in the UAE, where it operates 59 plants.
The firm is targeting future growth by delivering its scheduled programme of building plants.
Tabreed's shares rose 0.7 per cent to Dh1.30 during trading yesterday morning on the Dubai Financial Market.
tarnold@thenational.ae
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