Dubai: Dubai’s Tecom Group has seen net profits gain a robust 51 per cent in the 9 months to September, totalling Dh639 million and driven in the main by ‘sustained increase in occupancy rates’. Tecom, listed on DFM, is one of Dubai’s biggest operators of free zones and with a portfolio that includes the Internet and Media cities, Dubai Industrial City and the Design District.
In the third quarter itself, net profit was up an even more impressive 70 per cent to Dh212 million, making it the entity’s ‘strongest’ three-month run.
In early trades on Wednesday (October 26), the stock is up 0.88 per cent to Dh2.28. On October 14, the Tecom Board of Directors had recommended an interim cash dividend of Dh200 million (4 fils per share), the first of the proposed Dh400 million payout for the second-half of 2022.
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.
"Improvement in commercial rental rates and strong occupancy levels will continue to drive revenue growth across our 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."
Among the new tenants were Motorola Solutions and M-Glory. "Occupancy levels for commercial and industrial assets was 83.5 per cent, registering the third sequential growth and a significant increase from year-end 2021 levels of 78.3 per cent," Tecom said. "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."
Tecom’s revenues for the period under review were at Dh1.48 billion, up from the Dh1.29 billion. The EBITDA for the nine months showed a 23.82 per cent increase. But what will please Tecom shareholders on DFM will be the 26.67 per cent delivered in the July to September phase. And of course, the 70.25 per cent increase on the net profit side.
Tecom's nine-month numbers were helped by:
* Funds from Operations was Dh864 million, a 34 per cent year-on-year increase, 'demonstrating the company’s continued focus on driving quality revenue and enhancing its operating efficiency';
* The loan-to-value is at 16 per cent, and the net debt-to-EBITDA ratio (a measure of financial leverage) is at 2.2x on 'strong EBITDA growth and the company’s continued hedging against rising interest rates'.
"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," the CEO added.