Dubai: The Tecom Group’s net profit for the second quarter – a period that also saw it list on DFM – is up a healthy 54.1 per cent to Dh237.27 million. For the first six months, net profit totalled Dh427.53 million, which is a 43.4 per cent gain year-on-year.
"Our performance reflects the constructive demand-supply dynamics of the commercial and industrial real estate market," said Abdulla Belhoul, CEO of Tecom Group. "At the end of the period, the consolidated occupancy level at our operating assets was 82 per cent, an encouraging increase from the 78 per cent at the end of December 2021, reflecting positive business sentiment of our over 7,800 customers and reinforces our leadership position in Dubai."
As one of Dubai’s biggest business hub operators, Tecom oversees the Dubai Internet and Media cities as well as the fast-emerging Industrial City and Science Park. The first results after the IPO should enthuse Tecom shareholders today. The stock had slipped post-listing amidst general investor concerns over inflation, US interest rate hikes and what they would mean for demand patterns in the Dubai property market.
The Tecom stock was up 1.68 per cent to Dh2.41 on Wednesday.
2.7 x
The Tecom Group's net debt-to-EBITDA ratio has improved to 2.7x, owing to a hedging strategy against
rising interest rates
Revenue side
On revenues, Tecom first six months provided a 15.8 per cent boost to Dh989 million, helped by ‘increase in occupancy rates’ across commercial and industrial properties and ‘strong’ revenue growth from value-added services. (It was recently that Dubai Internet City launched D/Quarters as a co-working initiative.)
"We are optimistic in our ability to sustain a steady increase in our occupancy levels and high customer retention levels for the upcoming period," said Belhoul. "This will add further stability to our revenue and cashflow for the midterm."
The 43.4 per cent H1-2022 net profit spike fed off the double-digit growth in revenues, ‘operational efficiencies and lower total financing costs’. "Our scale, resilient financial performance through various market cycles, strategic land bank, and current strong leverage position will enable us to swiftly capture those opportunities, further supporting long-term sustainable growth and helping to unlock additional value for our shareholders," the CEO added.
Tecom Group has not issued any additional guidance on its planned dividends. At the time of the IPO, the company confirmed it will adopt a semi-annual dividend distribution policy on dividends, in October and April of each year. The company expects to pay a dividend amount of AED800 million per annum for the first three years.
Our strong performance in the first-half of the year builds on our solid performance in 2021 and underscores the strength of our well-balanced business model and the resilience of our diversified portfolio of quality, strategically located assets and value-added services
