Dubai, UAE–TECOM Group has posted a 13 percent jump in net profit to $132 million in the first half of 2023.
The company also reported a 6% year-on-year (YoY) increase in revenue to $285 million.
Malek Al Malek, Chairman of the Board of TECOM Group, said, “Our performance was underpinned by Dubai’s robust economy and its visionary leadership. Based on our exceptional results, I am pleased to announce that the Board has approved an interim dividend distribution of AED400 million to shareholders for the first half of this year, to be distributed in September 2023.”
Abdulla Belhoul, Chief Executive Officer of TECOM Group, said: “Commercial real estate in Dubai is growing steadily owing to Dubai’s appeal as a global city to businesses, talent and investors alike and its macroeconomic resilience. Most of our leased assets, especially Grade A centrally located offices, have recorded high occupancy rates.
“We are confident in our ability to sustain occupancy levels for the remainder of the year while also focusing efforts to drive further efficiencies to sustain the strong EBITDA margin. We will continue to execute our clear strategy, supported by our robust financial position, top-notch talent, and access to strategically located land banks to help unlock greater value for our shareholders.”
The occupancy level for commercial and industrial assets was 87% as of 30 June 2023, registering a 5% increase from the period ended 30 June 2022. The overall customer retention rate stood at 92% as of 30 June 2023.
The company also reported an 18% YoY increase in a number of customers, surpassing 10,000 customers, including leading multinational and regional companies.
Some of the most noteworthy new customers include Salesforce, which established its first Middle East office, as well as pharmaceutical giant AstraZeneca, biotechnology company Virax Biolabs Group, business school EM Normandie, F&B supplier and manufacturer IFFCO Group (THRYVE™ factory).
EBITDA increased by 14% YoY to $225 million, mainly driven by improved revenue quality and enhanced management of operating expenses.
Funds from operations (FFO) stood at $185 million, representing an increase of 8% YoY, a testament to improved revenue quality and operational efficiency across all income-generating assets.
TECOM Group has had a very active year across most of its business districts, reflecting a strong level of business confidence.
In line with the rising demand for purpose-built and well-connected workspaces, TECOM Group expanded its D/Quarters co-working solutions to Dubai Science Park, strengthening the position of the Emirate as a magnet for global talent and businesses of all sizes and from any sector.
The group continued to enable the entrepreneurial ecosystem in Dubai by launching a science-focused incubator in collaboration with Dubai Science Park. in5 Science will support startups under the Dubai Economic Agenda D33 umbrella.
Virax Biolabs Group announced the establishment of its regional headquarters at Dubai Science Park, further strengthening the region’s scientific research and biotechnology landscape.
Dubai Industrial City contributed further to the Emirate’s economic growth by attracting approximately AED1 billion in investments from local and global manufacturing companies, reflecting the confidence in the business district and Dubai as a strategic destination for manufacturing and industrial activities.
Dubai Industrial City signed major strategic partnerships with the Ministry of Industry and Advanced Technology, the Ministry of Climate Change and Environment, the Emirates Development Bank (EDB), and Dubai’s Department of Economy and Tourism to support the sustainable development of the manufacturing sector in the UAE and strength its position as an attractive global industrial hub.
During the first six months of the year, the group made good progress on several ESG matters. The company continued to deliver value to customers, with customer satisfaction levels increasing to 88.6% in H1 2023 from 87.8% in FY 2022.
TECOM supported 366 startups as part of in5, up from 346 startups at the end of FY 2022. Also, 9% of the energy consumption was generated by clean energy sources, and 179 tonnes of waste was recycled across all business districts.
The company distributed 12,000 meals during the holy month of Ramadan. It also partnered with Emirates Red Crescent to launch “The Good Store”, a virtual store encouraging people to donate essential supplies such as food, clothing and shelter materials.
During its meeting on 1 August 2023, the Board of Directors approved the first interim dividend payment of AED400 million, distributed in September 2023. As per the dividend policy set out in the IPO prospectus, TECOM Group is committed to paying a total dividend amount of AED800 million per annum through September 2025.