Home UAE Dubai TECOM Group announces Q3 ’23 results, reports 34% rise in net profit The group’s Q3 earnings before interest, taxes, depreciation and amortisation rose by 13 per cent YoY to Dhs410m by Gulf Business November 1, 2023 Image: TECOM Group TECOM Group has announced its financial results for the third quarter (Q3) and the nine-month period ending September 30. The group delivered a strong financial and operational performance, reporting a 7 per cent year-on-year (YoY) increase in revenue to Dhs1.6bn and a 20 per cent YoY increase in net profit to Dhs768m in the first nine months of 2023. Q3 saw the group increase revenue increased by 10 per cent YoY to Dhs541m. Earnings before interest, taxes, depreciation and amortisation (EBITDA) rose by 13 per cent YoY to Dhs410m and the EBITDA margin increased to 76 per cent in Q3 2023, impacted by the positive top-line performance and enhanced operational efficiencies. Net profit for the three-month period increased by a good 34 per cent YoY to Dhs283m, underscored by strong growth in revenues, lower operational expenses and lower financing costs, which was supported by the recent refinancing of the loan facility at lower margins and more favourable terms. TECOM Group nine-month highlights The group also revenue increase in the first nine months of the year. Revenue increased by 7 per cent YoY to Dhs1.6bn, supported by the continued improvement in occupancy levels and the sustained strong customer retention rates across the group’s portfolio. Occupancy level for commercial and industrial assets reached 88.5 per cent during the period, a notable increase from the 83.5 per cent occupancy rate recorded in the year-ago period. This was predominately driven by growing demand for quality office space and industrial storage & logistics facilities. The group saw an increase of 17 per cent in the number of new customers, adding more than 1,600 new customers. Customer retention rate stood at 89 per cent by the end of the nine-month period of 2023, reaffirming the group’s unique offering and high customer satisfaction rates. EBITDA increased by 14 per cent YoY to Dhs1.2bn and the EBITDA margin expanded by 4 per cent to reach 78 per cent by end of September, mainly driven by improved revenue quality and enhanced cost efficiencies, in line with group’s strategy to optimise its core business. Net profit grew by 20 per cent YoY to Dhs768m in line with the positive top-line performance and strong growth across all business segments, underpinned by the continued boom that the real estate market in Dubai is witnessing. Funds from operations (FFO) stood at Dhs1.1bn, representing an increase of 22 per cent YoY, driven by improved operational efficiencies across all assets. The group maintained a healthy debt profile with a loan-to-value (LTV) ratio of 14.2 per cent and a 7.1x EBITDA-to-interest ratio, driven by prudent financial management and continued hedging against rising interest rates. Read: TECOM Group’s Q1 2023 net profit rises 34% to Dhs255m Abdulla Belhoul, CEO, TECOM Group, said: “Our outstanding financial and operational performance over the nine-month period reflects our ability to take advantage of Dubai’s favourable market conditions as we continue to successfully push ahead with our strategy of optimising our diverse portfolio and sustaining high occupancy rates. “Our 10 business districts are almost near full capacity, with our existing customers continuing to renew their leases with us and new customers coming on board. This is a testament to the strong demand for our quality assets and unique, fully serviced strategic locations underpinned by buoyant business conditions. “Furthermore, our business model, which includes a balance between long-term and short-term leases, enables us to take advantage of rising prices while providing us with greater revenue stability and visibility.” Tags Dubai Financial highlights Q3 2023 Real Estate Tecom Group You might also like Dubai explores remote work, flexible hours to alleviate peak-hour traffic Dubai begins construction of its first air taxi station near DXB Parkin reports strong Q3 growth with 25% revenue increase Emaar Development sees Q3 property sales surge 66%