Tecom Group FY 2022 revenues up 12% to Dh2 billion

Board of Directors recommends a dividend payment of Dh200 million (4.0 fils per share) in April 2023

A view of Dubai Media City, a Tecom cluster. - KT file
A view of Dubai Media City, a Tecom cluster. - KT file

A Staff Reporter

Published: Fri 10 Feb 2023, 1:59 PM

Tecom Group PJSC, the creator of specialised business districts and communities, on Friday announced a 12 per cent year-onyear increase in revenues to Dh1.97 billion and a record 28 per cent YoY increase in net profit to Dh725.62 million for the financial year ended 31 December 2022.

In a statement, the Group attributed the results due to strong demand for its commercial and industrial properties and supported by Dubai’s strong macroeconomic environment and buoyant business and consumer confidence.

The Board of Directors, in a meeting held on February 9, recommended a dividend distribution of Dh200 million (4.0 fils per share).

As per the dividend policy set out in the IPO prospectus, TECOM Group is committed to paying a total dividend amount of Dh800 million per annum over the first three years of being a listed company. The first interim dividend payment of Dh200 million (4.0 fils per share) was distributed in November 2022. The next dividend payment will be distributed in April 2023 for the year 2022, subject to shareholder approval at the upcoming Annual General Meeting.

FY 2022 revenue rose by 12 per cent year-on-year to Dh1.97 billion, driven by higher occupancy levels, stronger customer retention rates and an increase in the number of new customers across the Tecom Group portfolio. As of December 31, 2022, the occupancy level for commercial and industrial assets was 86 per cent, registering the fourth quarter of sequential growth and a substantial increase from year end 2021 occupancy level of 78 per cent.

Customer retention rates stood at 92 per cent. Over the year, more than 1,700 new customers joined the business districts that cater to six sectors – Technology, Media, Education, Science, Design and Industrial – with high demand for both ‘built-to-suit’ and ‘built-to-lease’ properties.

Earnings before interest, taxes, depreciation and amotisation (Ebitda) increased by 15 per cent year-on-year to Dh1.35 billion and the Ebitda margin expanded to 68 per cent in FY 2022, compared to 66 per cent in FY 2021. The higher Ebitda and Ebitda margin was due to improved revenue quality from all the different business segments as well as enhanced management of operating expenses.

Net profit grew by a record 28 per cent year-on-year to Dh725.62 million in line with the top-line positive performance, which was also supported by the resilience of the economic environment in Dubai and the upward trend in its real estate market.

The robust performance and overall positive real estate market sentiment resulted in an increase in the fair value of the Tecom’s investment property portfolio by 9.7 per cent since March 2022 from Dh19.41 billion to Dh21.29 billion.

Based on closing share price on December 30, 2022, the Group’s annualised dividend yield stood at an attractive rate 7.1 per cent, which is among the top returns for shareholders who have invested in companies listed on the Dubai Financial Market (DFM).

Ebitda for the fourth quarter stood at Dh260 million and net profit at Dh87 million, impacted primarily by increased depreciation expense following the delivery of new built-to-suit projects and additional capital expenditure (capex) on enhancement of existing assets as well as higher operating costs as a result of return to normal activity levels compared to the same period of last year, in which the Group also took precautionary measures in Q4 2021 due to the Covid-19 pandemic.

Malek Al Malek, Chairman of Tecom Group.  - Supplied photo
Malek Al Malek, Chairman of Tecom Group. - Supplied photo

“Since our successful IPO in July 2022, Tecom Group continued to realise unparalleled achievements, demonstrating strong results and rewarding shareholders with attractive returns. The excellent performance, surpassing expectations at the time of our listing, has benefitted from Dubai’s strong economy and the long-term vision of our nation’s leadership, which continues to support sustainable economic growth through robust government reforms and initiatives. Looking ahead, we are focused on expanding and optimising our world class assets, embedding sustainability deeper into our core operations and capitalising on the booming real estate market in Dubai, which is continuing to grow and yield strong returns,” Malek Al Malek, Chairman of Tecom Group said.

Abdulla Belhoul, Chief Executive Officer of Tecom Group. - Supplied photo
Abdulla Belhoul, Chief Executive Officer of Tecom Group. - Supplied photo

Abdulla Belhoul, Chief Executive Officer of Tecom Group, added: “Our strong first full year results since listing are a testament to our ability to deliver on the growth strategy outlined at our IPO and our rigorous financial and operational discipline. We expect sustained growth in rental rates and occupancy levels for the foreseeable future which will enable us to maintain a robust financial performance and unlock greater value for shareholders. We will also continue to look at developing existing and new assets to improve our offering. Together, this will support the Group’s growth agenda and cement our position as Dubai’s leading specialised commercial and industrial real estate owner and operator.”

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