National Central Cooling Company PJSC, ‘Tabreed’ the Abu Dhabi-based utility company released its second quarter 2009 consolidated financial results today. For the six months ending 30 June 2009, total revenue increased by 22 per cent and gross income increased by 12 per cent. Before certain non-cash finance costs associated with the company’s 2011 Convertible Sukuk, consolidated net income increased by 12 per cent over the same period in line with gross income.
The increase in gross income was largely due to an increase in billing capacity while delivering improvements in plant efficiency. After the mark-to-market non-cash finance costs, reported consolidated net income fell by 4 per cent over the same period in 2008.
Financial Highlights – Six-months ending 30 June 2009:
- Total revenue increased by 22 per cent to AED 373.8 million, compared to AED 307.6 million in the same period in 2008
- Gross income increased by 12 per cent to AED 170.9 million compared to AED 152.5 million in 2008
- Net income increased by 12 per cent to AED 57.6 million compared to AED 51.4 million in the same period in 2008
- Due to a non-cash finance costs (mark-to-market) associated with the 2011 Convertible Sukuk, reported net income fell by 4 per cent to AED 47.4 million compared to AED 49.5 million in the corresponding period of 2008
- Chilled water revenue for the period was AED 148.2 million, a 21 per cent increase over the same period in 2008. This is attributable to an increase in chilled water sales as new plants came on stream and as seasonal demand increased. Total sales increased by 21,725 tons (10.3 per cent) compared to the first half of 2008
- Basic and diluted earnings per share were stable at AED 0.02 per share
Sujit S. Parhar, Tabreed CEO commented:
“During the first six months of 2009 there have been a number of significant management, operational and process changes at Tabreed. In particular, a strong emphasis is being placed on increasing operational efficiencies to enhance the yield that we derive from the assets we’ve invested in over the last 11 years. These changes reflect the mandate of the Board of Directors to better align Tabreed’s business strategy with the infrastructure demands of Abu Dhabi. However it is important that the business continues to deliver solid results through this transitionary period.
I believe the results we have just announced demonstrate the strong fundamentals of our business and the commitment of all of our employees to improve performance. The changes that we are implementing are not yet fully in place but I am confident that once complete, they will position the company to continue to improve performance and deliver on the expectations of our shareholders.”
Steve Ridlington, Tabreed CFO added:
“Given the difficult economic climate of 2009, Tabreed’s first half results, which show a 22 per cent increase in revenues and a 12 per cent increase in underlying net income compared to last year, represent a significant achievement. We are particularly pleased about the improving results from our chilled water business as new capacity comes on stream. This will deliver long term and stable revenues for the company’s future.
However, the remainder of 2009 will be challenging for Tabreed reflecting the continuing difficult trading conditions. Our focus must continue to be on the fundamentals – safeguarding our customer base, delivering the pipeline of new projects, and securing long-term financing to enable us to meet the region’s infrastructure demands.”
During the first half of 2009 Tabreed was successful in securing an AED 368 million Ijara financing from Abu Dhabi Commercial Bank and renewing an AED 147 million facility with BNP. In early July 2009 the company secured a new AED 750 million facility with First Gulf Bank. The first tranche of this loan was drawn in July.
During the second quarter 2009 Tabreed made a number of changes to its senior management team including the appointment of Sujit S. Parhar as CEO in May 2009, Steve Ridlington as CFO in April 2009 and the appointment of a new Projects Director, HR Director, Corporate Communications Director, and IT Director.
Three new district cooling plants online came online during the period, adding 16,595 tons of new cooling capacity from the following projects:
- UAE University, Al Ain, 2,877 TR
- Al Khoor Towers, Abu Dhabi, 7,418 TR
- Aldar, Abu Dhabi, 6,300 TR
Tabreed had 17 district cooling plants under construction during the second quarter of 2009 including six in Abu Dhabi, 10 in Dubai, and one in Fujairah. Highlights of construction progress the company made during the period include:
- Yas Island Plant 1, commissioned in July 2009
- Tabreed 7, serving the military, to be commissioned in August 2009
- Tabreed 8, serving the military, to be commissioned in October 2009
- Dubai Metro, six plants to come online later this year
As of 30 June 2009, Tabreed’s total installed cooling capacity is 353,000 tons across 34 district cooling plants.
The company expects nine further plants to come on stream in the remainder of 2009.