Tecom Group, the creator of business districts and vibrant communities, has posted a nine-month (9M) net profit of AED768 million ($209.1 million) a 20% YoY jump on the back of solid revenues of AED1.6 billion ($440 million).

 

Revenues, which have risen 7% YoY, was supported by the continued improvement in occupancy levels and the sustained strong customer retention rates across the group’s portfolio. 

 

Occupancy level for commercial and industrial assets reached 88.5% as of September 30, 2023, a notable increase from the 83.5% occupancy rate recorded in the year-ago period. This was predominately driven by growing demand for quality office space and industrial storage and logistics facilities. 

 

New customers

The group saw an increase of 17% in the number of new customers, adding more than 1,600 new customers. Customer retention rate stood at 89% by the end of the 9-month period of 2023, reaffirming the group’s unique offering and high customer satisfaction rates. 

 

EBITDA increased by 14% YoY to AED1.2 billion and the EBITDA margin expanded by 4% to reach 78% in 9M 2023, mainly driven by improved revenue quality and enhanced cost efficiencies, in line with Group’s strategy to optimise its core business. 

 

The net profit growth was in line with the positive top-line performance and strong growth across all business segments, underpinned by the continued boom that the real estate market in Dubai is witnessing. 

 

Funds from operations (FFO) stood at AED1.1 billion, representing an increase of 22% YoY, driven by improved operational efficiencies across all assets.

 

Healthy debt profile

The group maintained a healthy debt profile with a loan to value (LTV) ratio of 14.2% and a 7.1x EBITDA-to-interest ratio, driven by prudent financial management and continued hedging against rising interest rates. 

 

Q3 2023

In the third quarter of 2023 (Q3) revenue increased by 10% YoY to AED541 million and a strong sequential growth was seen since the beginning of the year as the group continues to take advantage of the favourable commercial real estate market conditions in Dubai.

 

EBITDA rose by 13% YoY to AED410 million and the EBITDA margin increased to 76% in Q3 2023, impacted by the positive top-line performance and enhanced operational efficiencies. 

 

Net profit for the three-month period increased by a remarkable 34% YoY to AED283 million, underpinned by the strong growth in revenues, lower operational expenses and lower financing costs which was supported by the recent refinancing of the loan facility at lower margins and more favourable terms.  

 

Favourable market conditions

Abdulla Belhoul, Chief Executive Officer, Tecom Group, said: “Our outstanding financial and operational performance over the nine-month period reflects our ability to take advantage of Dubai’s favourable market conditions as we continue to successfully push ahead with our strategy of optimising our diverse portfolio and sustaining high occupancy rates.”

 

“Our 10 business districts are almost near full capacity, with our existing customers continuing to renew their leases with us and new customers coming on board.

 

“This is a testament to the strong demand for our quality assets and unique, fully serviced strategic locations underpinned by buoyant business conditions. We are very proud of the growing, diverse and quality customer base we have built and will continue to focus our efforts on being the go-to destination for international and regional businesses. Furthermore, our business model, which includes a balance between long-term and short-term leases, enables us to take advantage of rising prices while providing us with greater revenue stability and visibility.”

 

Project development highlights

Given the demand surge for Grade A storage & logistics spaces across Dubai, the Group will develop new storage & logistics facilities with a total GLA of 200,000 sq ft in Dubai Science Park.--TradeArabia News Service