Dubai air-conditioning provider Empower has halted plans to go public citing adverse market conditions, the utility's chief executive said on Tuesday, in a blow to the emirate's attempts to diversify its stock exchange.
Oil is thought to account for only about 5 per cent of Dubai's economy, but the slump in crude prices has nevertheless sent the share prices of Dubai-listed companies tumbling.
The main stock index, in which real estate and bank stocks dominate, is down 40 per cent from a 2014 peak.
"Empower is a company that must go public ... we have studied this, we came up with the result that we will (launch an) IPO (initial public offering) but the market conditions are not encouraging," Ahmed bin Shafar, Empower's chief executive told a news conference to announce the company's annual results.
"We are freezing the decision until we see the right time."
Empower, a joint venture between Dubai's monopoly electricity and water provider and a company owned by the emirate's ruler, made an annual net profit of Dh516 million ($141 million) in 2015, up 27 per cent year-on-year.
Its total revenues for the year too surged 12 per cent year-on-year to reach Dh1.66 billion ($452 million).
According to Bin Shafar, Empower follows a business model that works on the strategy of investing in plants and network infrastructure driven by actual demand in specific projects, said a statement from the Emirati company.
This has resulted in sustainable growth of the company and avoided unproductive investments, he added.
Announcing the results, Bin Shafar, said: "Empower achieved an annual increase of 6.7 per cent in its cooling capacity, to pass it over 1,115,000 Refrigeration Tons (RT) in 2015. Moreover, the company boosted its production and commissioned new plants."
"The district cooling industry achieved significant growth in 2015 not only in the UAE but also internationally," he stated.
"Many countries are now more determined to adopt district cooling, thus reducing their dependence on conventional cooling systems. It is a matter of pride for UAE to be at the forefront of countries that deployed district cooling technologies since a long time," he added.
Bin Shafar pointed out that the company had increased its workforce by 13 per cent last year amid growing demand.
On its performance, Bin Shafar said: "Empower has wrapped up 2015 with series of achievements that have established its position as the world’s largest district cooling services provider. These include expansion of business operations, enhancement of its global contribution to the district cooling sector, conclusion of a series of new deals and agreements, increase in community support, better employee satisfaction and happiness, and a qualitative shift in the reduction of environmental impact."
Empower, he stated, has made significant efforts to promote district cooling as an alternative to conventional cooling systems that deplete natural resources of oil and water and has harmful environmental and economical impacts.
"The development of Empower derives from the qualitative progress of the UAE, which has become a role model in sustainable development. The UAE is one of few in the world that took the initiative to think about conservation of natural resources since long time," he added.-Reuters and TradeArabia News Service
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