Higher finance costs eat into profits at Abu Dhabi's Tabreed

Tabreed, the Abu Dhabi central cooling company, today posted Dh32.8 million (US$8.9 mn) in net profit for the first quarter, a 25 per cent drop from the same period last year.

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The company attributed the drop to higher finance costs.

Operating profit increased by 55 per cent from the first quarter of last year, based on 23 per cent increase in revenue, from Dh199.7m in 2010 to Dh245.6m in the first quarter of this year.

Additional connections drove up revenue for the company's core chilled water business, which increased 32 per cent to Dh183.6m, up from Dh139.1m in the first quarter of 2010. But revenue declined in the manufacturing and services sector due to the regional real estate slow down and increased competition, the company said.

On April 1 Tabreed completed recapitalisation programme, including the refinancing of Dh2.63 billion in debt and arranging Dh3.1bn in long term capital from Mubadala, the Abu Dhabi government's investment arm.