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Nine-month net profit for Tecom Group, creator of specialty business districts, surged 51 percent year-on-year to AED639 million ($174 million), helped by strong revenue growth, lower expenses and prudent financial management.
Third quarter (Q3) net profit surged 70% year-on-year (YoY) to AED212 million, the strongest quarter as growth across segments continued.
Accordingly, the company’s board of directors has proposed an interim cash dividend distribution of AED 200 million in accordance with the dividend policy.
9 months income
Nine-month revenue in 2022 rose 15% year-on-year to AED1.48 billion, driven by strong growth across all business segments. Commercial and industrial assets had an occupancy rate of 83.5% as of September 30, 2022, the third consecutive increase and a significant improvement from the 78.3% occupancy rate at the end of 2021. The continued increase in occupancy is attributable to very strong customer retention rates and the addition of new customers to the portfolio supported by Dubai’s continued economic growth and diversification. New customers include Motorola Solutions, Rakuten, Dubatt and M-Glory, among others.
EBITDA increased 24% year-on-year to AED 1.09 billion due to revenue growth and improved quality of revenue across all business segments and lower operating expenses.
Funds from operations (FFO) were AED864 million (AED1,228 LTM1F), up 34% year-on-year, demonstrating the company’s continued focus on driving quality revenue and improving operational efficiency.
The loan-to-value (LTV) ratio was 16%, and the net debt to LTM2 EBITDA ratio (a measure of financial leverage) was 2.2x, due to strong EBITDA growth and the company’s continued hedge against rising interest rates.
third quarter revenue
Revenue in the third quarter was AED490 million, up 12.48% year-on-year, mainly due to higher occupancy across the portfolio, especially offices, warehouses and staff quarters.
EBITDA for the three-month period was AED364 million, up 26.76% year-on-year, supporting margin expansion. Higher EBITDA levels were driven by revenue growth and lower operating expenses due to the implementation of a group-wide efficiency improvement program.
Abdulla Belhoul, Chief Executive Officer of Tecom Group, said: “Our strong revenue and profit growth since the beginning of the year and our particularly strong performance in the third quarter is a testament to the Group’s ability to effectively implement its growth strategy to drive net asset value growth and Maximize shareholder returns.
“The rise in occupancy across our portfolio reflects a sharp rise in demand in the commercial real estate market, supported by Dubai’s economic expansion and government’s growth-enhancing initiatives to further improve ease of doing business and attract top global talent and foreign direct investment. ”
Great location
He said that as Dubai’s largest commercial real estate owner, Tecom Group remains well-positioned to capitalize on the encouraging economic growth and positive business sentiment in the six knowledge-based economy sectors it serves.
“Improving commercial rental rates and strong occupancy rates will continue to drive revenue growth from our commercial rental properties, while structural medium-term tailwinds from the industrial, construction and logistics sectors will support our industrial, land rental and value-added services segments. Portfolio and complementary integrated service offerings, we remain optimistic about our ability to maintain strong financial performance given the uncertainties in global markets and will continue to contribute to strengthening Dubai’s position as an attractive global business and talent hub. “– arab trade news agency
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