Q2 net profits up 37% from Q1 as chilled water business drives strong growth
Q2 net profits up 37% from Q1 as chilled water business drives strong growth
National Central Cooling Company PJSC (‘Tabreed’), the Abu Dhabi-based utility company, released its consolidated second quarter financial results today. The company has registered robust performance from operations demonstrating the strength of its core chilled water business. Compared to the first quarter of 2011, group revenues grew 17 per cent to AED 286.6 million, while gross profits increased 15 per cent to AED 117.3 million. A reduction of AED 25m in finance costs as a result of the closure of the recapitalization program contributed to net profits increasing 37 per cent to AED 43.8m.
Financial Highlights – First half 2011 ended 30 June 2011
- Total revenue increased by 14 per cent to AED 532.2 million, compared to AED 465.1
- million in the same period in 2010
- Gross profit increased by 22 per cent to AED 219.3 million, compared to AED 180.1 million in the same period in 2010
- Chilled water revenue for the period was AED 425.6 million, a 29 per cent increase over the same period in 2010
- Utility efficiency gains and growth in scale have led to gross profit margin of 45 per cent and 102 per cent growth in profit from operations over H1 2010; EBITDA of AED 187 million – a 63 per cent increase over the same period in 2010
- US$ 200m Sukuk 06 repaid on maturity on 20th July 2011
- Whilst earnings remained comparable to the same period in 2010, as expected, with the increase in share capital from 243,380,000 to 659,063,000 (from the settlement of the 2008 Sukuk) and the inclusion of the AED 1.7 billion Mandatory Convertible Bond, EPS reduced from AED 0.21 to AED 0.06 over the same period in 2010
Waleed Al Mokarrab Al Muhairi, Tabreed’s Chairman said:
“An increased contribution from the company’s core chilled water business, a strong balance sheet, and full repayment, on maturity, of the US$ 200 million Sukuk all demonstrate that we continue to make good progress in the current year. Our focus remains on delivering financial and operational growth across the company, while maintaining a conservative balance sheet, creating sustainable value for shareholders.”
Sujit S. Parhar, Tabreed’s CEO, said:
“Our strong results prove Tabreed’s cash-generating capabilities. Our strategy of developing the business for the longer term by focusing on the core business of chilled water is paying off – this business segment has contributed over 90 per cent of the total EBITDA in H1 2011. Our diversified
customer base, long-term contracts, stable cost structure and strengthened corporate governance ensure that we are well positioned to deliver on our stated business plan.”
First Half 2011 Highlights: Chilled Water
Tabreed’s chilled water division delivered robust revenues and profits – revenues increased 29 per cent to AED 425.6 million, while gross profit increased 54 per cent to AED 190.6 million. Profits from operations registered a 102 per cent increase to AED 129.8 million and operating margins increased 31 per cent, compared to 19 per cent in the same period last year. This is largely driven by the inclusion of five new plants which have come online since H1 2010 and new customer connections. Progress on the capacity build-out program continued with 10,000 RT coming online in Q2 11, following the completion of two plant expansions. Total installed cooling capacity increased to 551,525 TR across 49 plants. 13
plants currently remain under construction, including eight plants for the Dubai Metro Green Line.
Value Chain Business
In line with the company’s strategy to focus on its core chilled water business, the contribution from the value chain businesses continued to decline as a result of Tabreed’s current capital spending program drawing to a close. Revenues stood at AED 106.7 million and gross profits at AED 28.7 million.