Tecom reports 51% rise in nine-month net profit

Dubai  / WAM   

Tecom group PJSC  the creator of specialised business districts and vibrant communities, on Wednesday announced its financial results for the third quarter of 2022 and first nine months ending September 30.

The group’s revenue stood at AED490 million, increasing 12.48% year-on-year (y-o-y) driven by rising occupancy levels across the portfolio,

especially office, warehouse, and worker accommodation. Ebitda for the three-month period reached AED364 million, up 26.76% y-o-y, supporting margin expansion.

The company’s Ebitda increased 24% y-o-y to AED1.09 billion, owing to revenue growth and improved revenue quality from all business segments and lower operational expenses, with its net profit growing 51% y-o-y to AED639 million, underpinned by strong growth in revenues, lower operational expenses, and prudent financial management.

Higher Ebitda levels was driven by top line growth and lower operational expenses thanks to the implementation of group-wide efficiency enhancement initiatives.

Meanwhile, net profit increased 70% y-o-y to AED212 million, as growth across the segments was sustained.

During the period from Janurary to September this year, The group’s revenue 2022 increased 15% YoY to AED1.48 billion, driven by strong growth across all business segments.

As at September 30, occupancy levels for commercial and industrial assets was 83.5 percent, registering the third sequential growth and a significant increase from year-end 2021 occupancy levels of 78.3 percent. The sustained growth momentum in occupancy is owed to the very strong customer retention rates, increase in new customers across the portfolio underpinned by Dubai’s continued economic growth and diversification. New customers include Motorola Solutions, Rakuten, Dubatt and M–Glory amongst others.

Funds from Operations (FFO) stood at AED864 million (AED 1,228 LTM1F ), a 34 percent YoY increase, demonstrating the company’s continued focus on driving quality revenue and enhancing its operating efficiency, while the group’s Loan to Value (LTV) landed at 16 percent, and the net debt to LTM2 Ebitda ratio, a measure of financial leverage, stands at 2.2x on strong EBITDA growth and the Company’s continued hedging against rising interest rates.

Abdulla Belhoul, Chief Executive Officer of Tecom group, said, “Our strong revenue and profit growth since the start of the year and our particularly remarkable performance in Q3 is a testament to the Group’s ability to effectively deliver on its growth strategy to drive net asset value growth and maximise shareholder returns.

“The increase in occupancy rates across our portfolio reflects the sharp rise in demand in the commercial real estate market, underpinned by Dubai’s economic expansion and the government’s pro-growth initiatives to further improve the ease of doing business and attract top global talent and foreign direct investment. As Dubai’s largest commercial real estate owner, TECOM Group remains well-positioned to capitalise on the encouraging economic growth and positive business sentiment within the six knowledge-based economic sectors it caters to.”

Belhoul added, “Improvement in commercial rental rates and strong occupancy levels will continue to drive revenue growth across our commercial leasing properties while structural medium-term tailwinds in the industrial, construction, and logistics sector will bolster our industrial, land leasing and value-add service segments. With a well-balanced portfolio and complementary comprehensive service offering, we remain optimistic in our ability to maintain a robust financial performance in light of global market uncertainty and will continue to contribute to strengthening Dubai’s position as an attractive global business and talent hub.”