Tecom Group, a creator of specialised business districts and vibrant communities in the UAE, has delivered a strong performance for the first half with its revenue topping AED1.05 billion ($280 million), up 6% year-on-year, driven by 87% occupancy rate attributable to high retention rate and addition of more than 1,500 new customers.
Announcing its financial results for the first six-month period ended June 30, 2023, Tecom said its net profit rose 13% year-on-year to AED485 million ($129 million) on the back of strong top line growth across all core business segments, enhanced operational efficiency, improved leverage position and lower cost of debt.
The ebitda for H1 increased by 14% on improved operating efficiencies across the group, a reflection of improved revenue quality, said Tecom in its statement.
Funds from operations (FFO) stood at AED 678 million, representing an increase of 8% YoY, a testament to improved revenue quality and operational efficiency across all income-generating assets, it stated.
On the second quarter (Q2) results, Tecom said its revenue increased by 6% YoY to AED535 million and also registered a solid sequential growth on the sustained demand across group’s portfolio.
The group's net profit for the three-month period increased by 19% YoY to AED283 million, excluding the impact of the one-off expense related to settling the old loan facility.
Its ebitda grew by 14% YoY to AED426 million, impacted positively by ongoing efforts to reduce operating expenses and drive operational efficiencies.
Tecom pointed out that the group’s debt profile has improved with loan-to-value (LTV) ratio of 15% and a 5.7x ebitda to interest ratio, on the back of the immediate positive impact of the recent refinancing of the existing AED7.6 billion loan facility, which was refinanced at lower margins and more favourable terms.
Impressed with the results, the board of directors has approved an interim cash dividend payment of AED400 million to be distributed next month.
Group Chairman Malek Al Malek said: "Tecom Group continued to deliver strong financial and operational performance owed to our dynamic strategy which aims to further increase our occupancy levels across the portfolio while also maintaining prudent capital management."
CEO Abdulla Belhoul said: "Commercial real estate in Dubai is growing at a steady pace owing to Dubai’s appeal as a global city to businesses, talent and investors alike and to its macroeconomic resilience."
"Our robust business model and our business districts’ market reputation have enabled Tecom Group to capitalise on the strong demand, supporting our solid performance during the period. The vast majority of our leased assets, especially Grade A centrally located offices, have recorded high occupancy rates," he stated.
"We are confident in our ability to sustain occupancy levels for the remainder of the year while also focusing efforts to drive further efficiencies to sustain the strong EBITDA margin. We will continue to execute our clear strategy, supported by our robust financial position, top-notch talent, and access to strategically located land bank to help unlock greater value for our shareholders," he added.
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