TECOM Group announces 49% growth in net profit in 2023

TECOM Group PJSC (DFM: TECOM), (the “Company” or the “Group”), the creator of specialized business districts and vibrant communities, today announced a record AED 2.2 billion in revenue, up 10% year-on-year ( I and). increase and a 49% year-on-year increase in net profit to AED 1.1 billion for the financial year ended December 31, 2023 (FY2023).

The strong financial performance was driven by strong demand from new and existing customers operating in the six sectors served by the Group, supported by Dubai’s resilient economic performance, government diversification and growth initiatives, and bullish sentiment. of consumers and businesses.

In a sentence, Malek Al Malek, president of the TECOM grouphighlighted the outstanding performance of Dubai’s commercial real estate sector in 2023, positioning TECOM Group as a key actor and contributor to the city’s knowledge-based and innovation-based economy. Al Malek also announced strong financial results, record revenue and net profit for the year, leading to a recommended dividend payment of AED 400 million to shareholders for the second half of 2023, reflecting confidence in maintaining growth momentum in 2024.

Abdulla Belhoul, CEO of TECOM Group, highlighted the company’s strong financial performance, attributing it to its ability to seize opportunities in Dubai’s thriving commercial and industrial market. He emphasized the successful conversion of demand-driven business growth into sustainable profitability through operational efficiency, resulting in increased EBITDA and EBITDA margins, and expressed confidence in maintaining growth momentum into 2024 and beyond. there with a well-balanced business model and strategic assets.

• Revenue increased 10% year-on-year to AED 2.2 billion, the highest level on record for the Group, driven by high occupancy rates thanks to high customer retention rates and an increase in new customers across the portfolio of the group.
  • As of December 31, 2023, the occupancy rate of the commercial and industrial portfolio was 89%, recording the third quarter of sequential growth and a substantial increase from the occupancy rate of 86% at the end of 2022.
  • Industrial land leasing experienced strong demand in 2023, as the occupancy rate rose to 94%, compared to an occupancy rate of 81% during 2022.
• EBITDA increased 23% year-on-year to AED 1.7 billion and EBITDA margin expanded to 76% compared to 68% in 2022. The significant increase in EBITDA and EBITDA margin is due to improved quality of income, attributed to the improvement of macroeconomic conditions.
• Net profit increased 49% year-on-year to an all-time high of AED 1.1 billion driven by strong growth across the board, lower operating and financial costs, due to the Group’s ongoing efforts to improve operations and reduce costs for complement your financing needs. and growth plans.
• Funds from operations (FFO) stood at AED 1.4 billion, representing a 21% year-on-year increase, thanks to improved collections and higher returns on income-generating assets.
• In June 2023, TECOM Group refinanced an existing AED 7.6 billion loan facility at lower rates and more favorable terms, allowing it to reduce its financing costs in the second half of the year and end the year with a debt-to-equity ratio. very comfortable capital. of 0.7x. As part of the refinanced credit facility, the Group can draw on a revolving credit facility of AED 3.2 billion to invest in the business.
• Following an independent valuation exercise, the market value of the Group’s real estate investment portfolio increased by 7.7% year-on-year to reach AED 22.9 billion as at 31 December 2023, achieving record growth of 18.2% since the IPO, reflecting the distinctive performance of its operating assets.
  Commentary on the fourth quarter of 2023
• Revenue increased 17% year-on-year to AED 579 million, due to an increase in new customers, including Yango, Sokovo, Himalaya Wellness and Nutridor, among others, as well as strong demand from existing customers.
• EBITDA increased 61% year-on-year to AED 419 million and EBITDA margins expanded to 72% compared to 53% in the same period last year. The strong EBITDA performance is driven by higher revenues and improved operations.
• Net profit more than tripled to AED 311 million.

Fourth Quarter 2023 Corporate Highlights

• Global technology leader Sprinklr and Yango, a technology company dedicated to improving local communities through global innovations, announced the opening of their new office in Dubai Internet City during GITEX Global 2023.
• Global biotechnology company BeiGene has opened its regional office in Dubai Science Park.
• Dubai Science Park and EY announced the first findings of their white paper focused on the healthcare sector during COP28.
• L’ÉCOLE, School of Jewelry Arts, founded in 2012 with the support of Van Cleef & Arpels, opened its doors in Dubai Design District (d3), with its inaugural exhibition, Garden of Emeralds.
• Dubai Knowledge Park celebrated its 20th anniversary as a center for lifelong learning and a catalyst for the region’s knowledge-based economy. He also held the Guinness World Record for the world’s largest Rubik’s Cube.
• Sokovo inaugurates an advanced hydroponic vertical farm in the industrial city of Dubai to reinforce the national food security agenda.
• Nutridor has expanded its regional presence for dairy brand Abevia with the opening of an AED 75 million factory in Dubai Industrial City.
• Himalaya Wellness has started construction of its upcoming AED 200 million state-of-the-art herbal pharmaceutical factory in Dubai Industrial City.

ESG 2023 Highlights

In 2023, TECOM Group remained dedicated to transparent governance, driving economic growth, fostering a diverse and inclusive workplace, and encouraging sustainable practices. Highlights of the year include:

• 9.83% increase in active startups, up to a total of 380 active startups in the in5 incubator compared to 346 in 2022.

• Invested almost AED 1.5 million in CSR activities leading to initiatives such as ‘The Good Store’ and ‘WeWalk’.

• 11% increase in clean energy generated up to 12.35 GWh compared to 11.14 GWh in 2022.

• 8 new LEED certified buildings, with a total of 30 LEED certified buildings in 2023.

• Active participation and commitments during COP28 with several strategic partnerships formed with Ministry of Industry and Advanced Technologyand Ministry of Climate Change and Environment

News source: Dubai Press Office