Tabreed reported a strong set of financials for 2023 and rewarded shareholders with a 'record' dividend. Image Credit: Gulf News

Dubai: The UAE district cooling company Tabreed has won shareholder approval to raise up to $1 billion via a non-convertible bond or a sukuk.

A resolution to this effect has been passed and the DFM-listed company can do so within the next 12 months. The funds, if thus raised, will be deployed at a time when Tabreed is mounting an aggressive expansion strategy into new markets, including India. 

With the shareholder approval in, it's up to the Board of Directors to issue the non-convertible (into shares) bonds and/or sukuk (whether directly or through a special purpose vehicle), in one or more tranches'.

The 'profit rate' on the debt offering must not exceed the 'prevailing market rate available to companies with the same credit rating as the company'.

Tabreed had reported a robust set of numbers in 2023, in large part boosted by its performance in the domestic market. This has set up a 'record high' dividend payment of 15.5 fils per share, which is an increase of 15 per cent over 2022. In 2023, Tabreed reported a growth of 9 per cent in revenue and an increase of 25 per cent in net profit - to Dh751 million - before tax to the parent entity.

The dividend yield works out to a solid 4.5 per cent. The stock is trading at Dh3.57. 

The simple fact is, that Tabreed’s steady growth is not just good for business but good for the

- Khaled Abdullah Al Qubaisi of Tabreed

Tabreed added 53,000 refrigeration tons [RT] of new connections across its network during the year gone by, which also saw the addition of six new plants. It now operates in six countries, including Saudi Arabia.

"As more countries turn their attention to ever increasing demands for cooling, realising too that they must act to mitigate climate change, district cooling is an obvious and well-established solution," said Khaled Abdullah Al Qubaisi, Chairman.

"Nobody does it better than Tabreed, which is why we are now gearing up for further international expansion."