Tabreed sees Q1 gross profits jump by 21% in 2011

Utility company posts first results since recapitalisation in April

Tabreed's Q1 profits jumped 21% for 2011. Image supplied.
Tabreed's Q1 profits jumped 21% for 2011. Image supplied.

RELATED ARTICLES: Tabreed gets $707m refinance of bank debt | Tabreed secures US$844m capital from Mubadala | Tabreed's net profit soars by 174%

Abu Dhabi’s National Central Cooling Company (Tabreed) has seen its first quarter gross profits for 2011 jump to AED101.9m ($27.7m), a 21% rise from 2010’s figures, the company said in a statement on Tuesday.

However, net profit decreased by 25 percent to $8.93m, compared to $11.92m during the corresponding figure from last year.

The results are the first to be announced since the company's successful recapitalisation program that began on April 1, 2011, the company said. The utility company’s total revenue for the first three months to March 31, 2011 reached $66.8m, a 23% jump from 2010’s $54.3m.

“The first three months of 2011 have been extremely positive for Tabreed. Our efforts have remained focused on strengthening our core business of chilled water, which is reflected in the sustained growth of our revenues,” Sujit S Parhar, Tabreed’s CEO, said in a statement.

Tabreed’s core business of chilled water produced revenues of $49.9m in the first quarter of 2011. The corresponding figure in 2010 was $37.8m. The jump in performance was driven by an increase in the number of connections, with gross profit coming in at $23.6m for the sector.

Although no additional plants were added in the first quarter of 2011, Tabreed said that work continued on thirteen plants that are under construction, including eight for Dubai Metro’s Green Line.

The company’s total installed cooling capacity remained at 541,525TR (tons of refrigeration) across its 49 plants.

“These results demonstrate the continuing improvements made by the management team and we look forward to a successful year ahead as Tabreed meets the strong demand for cooling infrastructure in the region,” Khaled Al Qubaisi, managing director for the utility company, said.

In March of 2011, the company secured $844m in long term capital from Mubadala Development Company. Under the agreement, Mubadala, the state backed investment vehicle, will provide $462.8m in eight year subordinated notes which will refinance Tabreed’s bridge finance.

The investment company will also provide a $381.1m convertible loan facility over two years, which will allow the company to meet its liquidity needs or pursue growth opportunities, Tabreed said in a statement at the time.

The company’s contracting segment also received a boost after completing the IKEA-Yas Island project, with recorded revenues coming in at $17.4m, in comparison to 2010’s $8.7m.

However, gross profits dropped to $762,339.2 from $3.13m as work progressed on its Sowwah Island project through its wholly owned subsidiary, Gulf Energy Systems.

Tabreed’s manufacturing segment reported a fall in revenues of $4.7m, compared to $6.1m in the previous year. Gross profit fell to $1.27m from $2.06m due to weak market conditions and reduced order books due to an increase in competition at Tabreed’s 60% owned subsidiary, Emirates Pre-insulated Pipes Industries.

The services section of the company, which is involved in the design and supervision of building electrical and mechanical works, reported a fall in revenues from $4.7m to $3.6m, while gross profits declined to $2.12m as the regional real estate slowdown hit the division.

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