Announces agreement to refinance Dh2.6 billion with its lenders to shore up its recapitalisation programme

National Central Cooling Company PJSC (Tabreed), the Abu Dhabi-based utility company, has released its full-year unaudited financial results for 2010. Tabreed revealed that for the 12 months ended December 31, 2010, its total revenue increased by 31% to Dh1,023.7 million, compared to Dh783 million in the same period in 2009, and the net profit, excluding the non-cash impairment declared for 2009, increased by 147% to Dh146.3 million over the same period in 2009.

The other financial highlights according to Tabreed are:

Gross profit increased by 53% to Dh426.4 million, compared to Dh278.1 million in the same period in 2009.

Net profit, excluding the non-cash impairment declared for 2009, increased by 147% to Dh 146.3 million, compared to Dh59.2 million in the same period in 2009.

Chilled water revenue for the period was Dh753.3 million, a 73% increase over the same period in 2009.

Basic and diluted earnings per share were Dh0.15, compared to Dh(1.22) in the same period in 2009.

Tabreed also announced that its bank lenders have unanimously approved the principal terms of an agreement to refinance Dh2.63 billion of liabilities and to extend Tabreed Dh150 million revolving credit facility.

The approved refinancing will convert its existing short-term bilateral and syndicated bank debt facilities into a consolidated facility, with an extended tenure and lower total cost of borrowing, giving it long-term flexibility to deliver its business plan, said Tabreed. 

Tabreed also revealed that it has secured an additional Dh400 million in short-term financing from Mubadala Development Company, PJSC, in the form of an amendment to the current Dh1.3 billion bridge loan. The bridge loan will provide Tabreed with funding, while the company completes its recapitalisation programme.

In this context, Khaled Al Qubaisi, Tabreed’s Managing Director said: “Today’s announcement is significant, not only because of the strong full-year unaudited results for 2010, but also because the approval of the terms of the refinancing by our bank lenders is a decisive step towards the successful recapitalisation of Tabreed. The Board and management of Tabreed are pleased to have reached this significant milestone and the company continues to work hard with all stakeholders to close the recapitalisation programme.”

Sujit S Parhar, Tabreed’s CEO, added: “The full-year unaudited results released today demonstrate a significant turnaround of the company’s performance over the last 12 months. The management and staff improved operational performance by refocusing on the core chilled water business. This has resulted in improved overall profitability and has positioned the company for growth, given the region’s demand for cooling infrastructure.”

Tabreed claimed that 13 plants and two plant expansions came online in 2010, adding 155,800 of gross capacity. This has brought its gross total installed cooling capacity to 541,525 TR across 49 plants as of 31 December 2010, Tabreed said. 
 
It also listed areas of both profit and loss:

Chilled water
Tabreed’s core business of chilled water produced revenues of Dh753.3 million, an increase of 73% when compared to Dh435 million in the same period in 2009. This performance was driven by new plants and plant expansions coming online, Tabreed said. The gross profit increased to Dh320.6 million from Dh165.8 million in the same period the year before.

Contracting
According to Tabreed, the company’s contracting segment recorded revenues of Dh 132.3 million, a decrease of 26%, when compared to Dh178.2 million over the same period in 2009, with a gross profit of Dh31.1 million compared to Dh23.1 million in the 12 months of the previous year. The increase in gross profit was due to less uncertainty around costs to complete, as projects reached completion, said Tabreed. It’s wholly owned subsidiary, Gulf Energy Systems, was the biggest contributor to the results, reflecting completion of several projects and progress on others, including Sowwah Island, the company revealed.

Manufacturing
Tabreed’s manufacturing segment reported revenues of Dh95.9 million, a decrease of 34%, when compared to Dh145.3 million in the same period in 2009, while the gross profit fell to Dh28.2 million compared to Dh45.5 million in the same period of 2009. According to Tabreed, the decline was due to reduced order books and an increase in competition at Tabreed’s 60%-owned subsidiary, Emirates Pre-insulated Pipes Industries.

Services
Tabreed’s services segment, which is involved in the design and supervision of building electrical and mechanical works, reported revenues of Dh76.3 million, a decrease of nine per cent, when compared to Dh83.7 million in the same period in 2009, while the gross profit decreased to Dh48.4 million compared to Dh51.6 million in the same period in 2009. Tabreed said that the change reflected the regional real estate slowdown that affected the services division, which includes Ian Banham & Associates (Tabreed has a 70% shareholding), l2l (60% shareholding) and Cooltech (100% shareholding).