Tabreed change in management with change in strategy
Bradley Hope
Abu Dhabi // The National Central Cooling Company, (TABREED), plans to aggressively sell off assets in an effort to increase profitability and fuel regional expansion, the new chief executive said today.
Karl Marietta, who took over the position this week, said the plan would involve selling between Dh500 million (US$136m) and Dh1 billion worth of district cooling assets to long-term investors each year for the next three years.
“We have been having such massive growth that we have to keep going back to our shareholders to raise capital and lots of debt,” he said. “We feel this plan could boost profitability and return on equity, as well as reduce the amount of pressure on raising capital.”
Dany Safi, the former chief executive, will remain on the board of directors as a special adviser.
Last year, Tabreed provided district cooling to about 500 buildings in the GCC. Its largest customer is the UAE Armed Forces, which accounted for 67 per cent of revenues last year.
Mr Marietta said the company’s new strategy was still under deliberation. Booz and Company and other consultants have been hired to help. The company had plans to expand even further in the region in keeping with moves to reduce their carbon footprint and save energy costs on projects. District cooling is a dramatically more efficient way of cooling buildings. It works by circulating cold water from a central station through pipes running through buildings.
Khadem al Qubaisi, the company’s chairman, said: “We are now ready to embark on a new phase of development which will see the implementation of a new strategy, some refinements to the management structure to boost company revenues and investors’ benefits.”
Tabreed’s shares closed at Dh1.55 today, down 32 per cent compared with a year ago.
At one point the stock was as par with ARMX and since it has fallen 50 fils. This should perk it up, so better accumulate....
I think it is rather misfortunate for the district cooling Co's, but the new slab pricing for electericity in UAE can makes the district cooling option less competitive.
It you buy your energy on your own from DEWA (or ADWEA) you get it up to 30% cheaper than when you buy it through a district cooling co
I think this will affect the long term growth of district cooling specially fro residential projects
P.S I consider the current price of Tabreed very high based on their financial peformance in the past 3 years. Very high P/E , modest profit growth.
Is there something I'm missing ?
Not as far as I can see. I think the same about Tabreed (TABREED) being overpriced. But selling assets will boost their profits and pull down the PE. _________________ UAE IPO list | posting guidelines
But selling assets will boost their profits and pull down the PE.
I agree, But, selling assets may improve earning only for a Q or 2. On the other hand, if these assets are required for operation and will be replaced with leased ones, then future earning may be impacted with the cost of lease.
I fell that such share price must have been supported by the major shareholders, otherwise it would correct to a more realistic 12-16 P/E
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? ... 
its nice technique and i guess i wud work 
