Net profits at Tabreed rose by nearly a third during the second quarter as revenues from chilled water climbed and funding costs dipped.
The district cooling company based in Abu Dhabi yesterday reported profits of Dh57.9 million (US$15.7m), up 32 per cent from Dh43.8m in the same period last year.
"The performance was driven by the core of our business," said Sujit Parhar, the chief executive of Tabreed. "Over the last two years we have done a lot of new plants and they are now delivering profitability."
It delivered a chilled-water plant at the UAE University campus in Al Ain in the second quarter, taking its total number to 59 across the GCC.
Profits from chilled water operations rose by 20 per cent to Dh155.5m in the first half of the year.
Tabreed is moving its focus primarily to chilled water as it phases out non-core parts of its business, such as building insulated pipes. As a result, revenue declined by 3 per cent to Dh515.7m in the first half of the year.
The firm has returned to an upward path 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 a third to Dh87.2m during the first half of the year. Cuts in spending also helped strengthen the firm's bottom line.
Tabreed's future growth prospects are closely tied to the increase of infrastructure spending in Abu Dhabi and the rest of the GCC.
But Mr Parhar believes building projects are on a more sustainable footing than before the downturn.
"We are working on numerous expansions of existing plants and new facilities," he said.
"The growth in the market now is more sustainable with no speculative building and we will grow in tandem with that."
The company is fully funded until the end of the year.
From next year, Tabreed plans to support itself from returns linked to long-term contracts for the plants it operates.
Last year's restructuring 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.
Tabreed's shares rose 3.1 per cent to Dh1.30yesterdayon the Dubai Financial Market.
tarnold@thenational.ae
if you go
The flights
Etihad and Emirates fly direct to Kolkata from Dh1,504 and Dh1,450 return including taxes, respectively. The flight takes four hours 30 minutes outbound and 5 hours 30 minute returning.
The trains
Numerous trains link Kolkata and Murshidabad but the daily early morning Hazarduari Express (3’ 52”) is the fastest and most convenient; this service also stops in Plassey. The return train departs Murshidabad late afternoon. Though just about feasible as a day trip, staying overnight is recommended.
The hotels
Mursidabad’s hotels are less than modest but Berhampore, 11km south, offers more accommodation and facilities (and the Hazarduari Express also pauses here). Try Hotel The Fame, with an array of rooms from doubles at Rs1,596/Dh90 to a ‘grand presidential suite’ at Rs7,854/Dh443.
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Difference between fractional ownership and timeshare
Although similar in its appearance, the concept of a fractional title deed is unlike that of a timeshare, which usually involves multiple investors buying “time” in a property whereby the owner has the right to occupation for a specified period of time in any year, as opposed to the actual real estate, said John Peacock, Head of Indirect Tax and Conveyancing, BSA Ahmad Bin Hezeem & Associates, a law firm.
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AT4 Ultimate, as tested
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Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.