Tecom Group FY 2023 net profit jumps 49% to Dh1.1 billion

Performance was driven by robust demand from new and existing customers


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Published: Wed 31 Jan 2024, 8:39 PM

Tecom Group on Wednesday announced a record Dh2.2 billion in revenue, representing a 10 per cent year-on-year (YoY) increase and a 49 per cent YoY increase in net profit to Dh1.1 billion for the financial year ended December 31, 2023.

The strong financial performance was driven by robust demand from new and existing customers operating across all six sectors the Group serves, underpinned by Dubai’s resilient economic performance, pro-growth and diversification government initiatives, and bullish consumer and business confidence.

Malek Al Malek, chairman of Tecom Group, said, “2023 was a remarkable year for the UAE and Dubai’s economy, supported by strong performance across several sectors, including the commercial real estate sector, which has outperformed other global markets. This has enabled Tecom Group to cement its position as the leading owner and operator of specialised business districts and a major contributor to the rapid growth of Dubai’s knowledge and innovation-based economy.

He added that the Board of Directors recommends a dividend payout of Dh400 million to the company’s shareholders for the second half of 2023. “Our commitment to rewarding shareholders is a reflection of the strong FY 2023 performance and optimism in our ability to sustain the growth momentum in 2024,” he noted.

Abdulla Belhoul, Chief Executive Officer of Tecom Group, stated, “What drove occupancy rates to 89 per cent across our portfolio was strong demand for assets in all sectors, especially those catering to customers in the industrial sector. We also witnessed a demand surge for customers requiring premium office spaces in centrally located districts, such as the Dubai Design District. While the majority of our revenue is attributed to retained customers, we are also pleased with an almost 15 per cent increase in the number of new customers from 2022.”

Revenue increased by 10 per cent YoY to Dh2.2 billion, the highest on record for the Group, driven by elevated occupancy rates on the back of high customer retention rates and an increase in the number of new customers across the Group’s portfolio.

The occupancy rate for the commercial and industrial portfolio was 89 per cent, registering the third quarter of sequential growth and a substantial increase from the year-end 2022 occupancy rate of 86 per cent.

The lease of industrial lands witnessed a strong demand in 2023, as the occupancy rate rose to 94 per cent, compared to an occupancy rate of 81 per cent in 2022.

Ebitda increased by 23 per cent YoY to Dh1.7 billion, and the Ebitda margin expanded to 76 per cent compared to 68 per cent in 2022. The significant rise in Ebitda and Ebitda margin is owed to enhanced revenue quality, which is attributed to improving macro conditions.

Net profit jumped 49 per cent YoY to an all-time high of Dh1.1 billion, driven by strong broad-based growth across the business and lower operational and financial costs, owing to the Group’s ongoing efforts to enhance operations and reduce costs to complement its funding needs and growth plans.

Funds from operations (FFO) stood at Dh1.4 billion, representing a 21 per cent YoY increase, on improved collections and increased performance of income-generating assets.

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