Tabreed's net profit soars by 174%

Sujit Parhar, CEO, said the last 12 months have been a 'turnaround'.

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District cooling provider Tabreed saw revenues soar by almost a third against 2009 and net profits rise 147% over the same period.

The district cooling provider, which assembles and installs air conditioning systems and sells chilled water used for district cooling, boosted its income to AED1.02billion against AED783million in 2009, with a 53% rise in gross profits, up to AED426million against AED278.1million.

Net profit, excluding the non-cash impairment for 2009, almost tripled to AED146.3million from AED59.2million.

The company also managed to secure a new AED150million revolving credit facility from its bank lenders, as well as approval of the principal terms to refinance AED2.63billion in liabilities. This will consolidate its short-term bilateral and syndicated debt into a single facility to reduce borrowing cost and extend the tenor of the loans.

It also secured an extra AED400million in short-term loans from Mubadala Development Company, the state-backed investor that recently bought AED2.8billion in convertible bonds from Aldar Properties, the developer. Aldar indicated last year that it would consider using providers of cooling systems other than Tabreed for new projects.

“Today’s announcement is significant not only because of the strong full-year unaudited results for 2010, but also because the approval of the terms of the refinancing by our bank lenders is a decisive step towards the successful recapitalisation of Tabreed,” said MD Khaled Al Qubaisi.

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CEO Sujit S. Parhar said the unaudited results represented a “turnaround” for the company over the last 12 months and was due to a refocus on the company’s core chilled water business, which produced AED753.3million of the revenue, up 73% against 2009.

By contrast, Tabreed’s contracting segment saw a decline in revenues, AED132.3million down from AED178.2million, or 26%, though an increase in gross profits was attributed to a greater clarity as to the completion schedule of projects.

Its manufacturing segment also saw a loss in revenue against the previous year, down 34%, due to a smaller order book and higher competition facing its subsidiary Emirates Pre-insulated Pipes Industries, in which Tabreed has a 60% stake.

Tabreed shares rose in Dubai yesterday 0.73% to AED1.38.