Release Date: August 09, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Revenue increased by 6% on a like-for-like basis, indicating strong operating performance driven by rising consumption volumes and new load connections.
- EBITDA margin remained healthy at 56%, showcasing efficient financial management.
- Tabreed reduced its debt by buying back Sukuk worth USD207 million, improving gearing and optimizing the balance sheet.
- The company achieved a 10% reduction in energy intensity and a 35% reduction in carbon emission intensity, highlighting significant progress in sustainability initiatives.
- Tabreed generated nearly AED1 billion in cash flow over the last 12 months, supporting ongoing investments and increased dividend payouts.
Negative Points
- The deconsolidation of Tabreed Park investments and higher one-off CPI gains in 2023 masked underlying growth in key financial metrics.
- There were delays in some projects due to obtaining NOCs from authorities and completion delays at customer ends.
- The introduction of corporate taxes in 2024 impacted the reported net profit for the first half.
- Tabreed's leverage ratio, net debt to EBITDA, remains at 4.2 times, which may be considered high by some investors.
- The updated capacity guidance was reduced to 100,000 RT from the previous 120,000 RT, with delays in Saudi Arabia affecting growth expectations.
Q & A Highlights
Q: Can you provide an overview of Tabreed's financial performance for the first half of 2024?
A: Adel Salem Al Wahedi, CFO, stated that Tabreed experienced a positive first half with revenue growth driven by a 6% increase in supply on a like-for-like basis. The EBITDA margin was healthy at 56%, and the normalized net profit before tax grew by 4%. The company also reduced its debt by buying back USD207 million in Sukuk, improving its financial position.
Q: What are Tabreed's strategic priorities and growth outlook?
A: Adel Salem Al Wahedi, CFO, highlighted that Tabreed is focused on expanding its capacity, with a new plant commissioned at Saadiyat Island and a total of 24,000 RT added in core markets over the last 12 months. The company is committed to sustainability, reducing energy intensity by 10% and carbon emission intensity by 35% in 2023. Tabreed aims to continue its growth momentum in the second half of the year.
Q: How is Tabreed addressing sustainability and environmental goals?
A: Adel Salem Al Wahedi, CFO, emphasized Tabreed's commitment to sustainability by enhancing energy efficiency and reducing carbon footprint. The company published its fourth ESG report and achieved significant environmental benefits, including energy savings equivalent to powering over 148,000 homes and preventing 1.55 million tonnes of CO2 emissions. Tabreed is also exploring renewable energy sources like geothermal and solar power.
Q: What are the key financial highlights for the first half of 2024?
A: Salik Malik, Vice President of Finance, reported that group revenue reached AED1.1 billion, a 1% increase year-over-year. The normalized revenue growth was 6%, driven by organic growth and an 8% increase in consumption volumes. EBITDA was AED603 million with a 56% margin, and the net profit before UAE corporate taxes grew by 4% to AED291 million.
Q: What is Tabreed's capacity guidance and future growth plans?
A: Adel Salem Al Wahedi, CFO, updated the capacity guidance to 100,000 RT, with 85% expected from consolidated entities. The company aims for an annual growth rate of 3% to 5% in connected capacity over the next three years, driven by ongoing projects, new project wins, and potential M&A opportunities. Tabreed is well-positioned to capitalize on the growing demand for sustainable district cooling solutions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
