Tabreed's H1 2024 Financial Results Showcase Robust Growth and Strategic Moves
Tabreed, the UAE's leading district cooling company, has unveiled its impressive financial results for the first half of 2024, underscoring its strong market position and strategic initiatives.
Summary
Tabreed's H1 2024 financial results highlight an 8% increase in consumption volumes, a 4% rise in net profit before tax, and a significant reduction in debt through Sukuk repurchases. The company has also strengthened its leadership with new appointments.
Abu Dhabi, United Arab Emirates - 8 August 2024: Tabreed, the UAE's leading international district cooling company, has released its consolidated financial results for the first six months of 2024, showcasing robust growth and strategic financial management.
The results reflect exceptional financial health driven by business growth, sustained profitability margins, and a commitment to sound financial discipline. Tabreed experienced an 8% year-on-year surge in consumption volumes, reflecting rising cooling demand during the summer and continued strategic expansion over the past 12 months. As a result of strong operating performance, the company delivered a normalised net profit before tax of AED 291 million – an increase of 4% compared to the same period last year.
H1 2024 also saw Tabreed's earnings before interest, taxes, depreciation, and amortisation (EBITDA) increase to AED 603 million, which compares favourably to the AED 590 million reported for H1 2023. Topline group revenue increased to AED 1.08 billion for H1 2024, compared to AED 1.067 billion during the first half of 2023. Tabreed's H1 2024 EBITDA margin increased year-over-year to 56%, demonstrating the company's ability to generate strong financial results while expanding its business.
The company generated impressive free cash flows of AED 978 million over the past 12 months, translating to a healthy yield of more than 10%. Demonstrating responsible management and prudent use of surplus cash, Tabreed further reduced its debt by 12% in the first half of the year by repurchasing an additional USD 207 million (AED 759 million) of its outstanding Sukuk due in 2025.
Including the USD 33 million (AED 121 million) Sukuk repurchased in 2023, Tabreed has now repurchased a total of USD 240 million (AED 880 million) of the outstanding Sukuk. The buyback is part of Tabreed's active management of its debt portfolio to optimise its funding cost and further strengthen its balance sheet. Simultaneously, the company increased cash returns to shareholders, evidenced by an increase of 15% year-on-year in cash dividends paid for the year 2023. During the annual general assembly held in March 2024, a cash dividend of 15.5 fils per share was declared.
In addition to its financial achievements, Tabreed has made significant changes to its Board of Directors, appointing Dr. Bakheet Al Katheeri as Chairman and welcoming new Board member Mansoor Mohamed Al Hamed. These appointments are expected to bring fresh perspectives and drive further growth for the company.
Given the company's strong financial performance, prudent debt management, and strategic leadership changes, investors may consider holding their positions in Tabreed. The company's consistent growth and commitment to shareholder returns make it a stable investment in the utility sector.
Source
Summary
Tabreed, a leading district cooling company in the UAE, reported strong financial results for the first half of 2024, driven by increased consumption volumes and strategic expansion. The company saw an 8% year-on-year increase in cooling demand, leading to a 4% rise in net profit before tax to AED 291 million. EBITDA grew to AED 603 million, and group revenue increased slightly to AED 1.08 billion. The EBITDA margin improved to 56%. Tabreed also generated free cash flows of AED 978 million over the past 12 months, reducing its debt by 12% through repurchasing USD 207 million of its outstanding sukuk. Including previous buybacks, the total repurchased sukuk amounts to USD 240 million. The company increased cash dividends by 15% year-on-year. Additionally, Dr. Bakheet Al Katheeri was appointed as Chairman, and Mansoor Mohamed Al Hamed joined the Board of Directors.
