(TABREED) National Central Cooling: Discloses its reviewed interim condensed consolidated financial statements for the period ended 30/09/2008
(TABREED) National Central Cooling: Announces its preliminary financial results for the 3rd QTR of 2008
Preliminary results consists of the financial statements without the notes to the accounts. No Director's report (or shareholder's report) included. National Central Cooling Company PJSC (TABREED) profit figures for third quarter 2008 are (EPS annualised in brackets):
EPS figures calculated from Net Profit / 1,213,380,000 shares outstanding.
TABREED share price as of 04 Nov 2008 was 1.11 dhs, so 2008 estimated PE is about 1.11 / 0.04 = 27.8, based on Q3 earnings, which is close to 3 times the average market PE of about 10. 2008 PE estimate based on M9 earnings is 1.11 / 0.05 = 20.6, which makes shares look cheaper but still expensive, even though that's the cheapest they've looked since the end of 2006, based on earnings.
As usual. The attraction of Tabreed seems to be sentimental - after all, buying shares of a district cooling company in the desert sounds like a no-brainer. But Tabreed profits are consistently uninspiring, and this quarter is down by a third from the second quarter this year, and little changed from the same quarter last year. Tabreed have announced this year that they intend to sell off assets. That will be profitable ... while it lasts.
Tabreed shares do look cheap based on Price to Book Value (PBV) though - at only 0.5 it's the cheapest in the UAE, along with RAK Poultry (RAPCO) and Umm AL Quwain Cement (QCEM) using the PBV as an indicator.
Tabreed shares are up 2.7% in morning trading so far on the DFM, while the index is up 1.7%.
Joined: 21 Oct 2008 Posts: 143 Location: Abu Dhabi
Posted on Wed 05 Nov 2008 12:24 by rmhumr
what is wrong with tabreed?
i'm an engineer, and actually right now working on a project now that uses tabreed's services. the project before i was in dubai, and used empower's services. it seems that district cooling is becoming more of the norm, and in theory is a very very viable solution especially in this region.
the first 2-3 years i would have expected no profits, as their start up costs are incredible (infrastructure etc..) with very little revenue. but by now their costs should have diluted to a tiny fraction.
so why aren't profits as grand as people imagine?
tabreed is primarily a utility company, and the way i undersand it, these type of models generate a consistent albeit relatively small profit over a long period of time.
think of it as risk vs reward. since it is a very low risk endevour, don't expect rewards to be great.
as for share price, what would be nice to put things in perspective is comparing their PE to other utility companies in the region, or comparing utility companies in other markets with other sectors, and sort of applying a rough comparison to tabreed's pe to this market.
also i imagine the primary driver for a share price in such a bussiness model is dividends, but again relatively small and consistent. so those should be compared to other publicly traded utilities in outside markets.
i'll try to do that soon, and let you know.
**** what i don't understand however is why their other expenses is so high, what other expenses? can we tell?
More details on Tabreed Q3 results, see the (TABREED) info for links to pdf downloads of accounts ...
The Gross Profit from operations is respectable enough but more than a quarter is sucked up in Finance Costs, and over a third in staff costs. Then, of the Net Profit, a third of that goes to Minority Interests leaving only a fil per share for shareholders.
Salaries and staff related costs (27,391)
Other administrative expenses (14,783)
Finance costs (22,127)
Other income 5,268
Share of results of associates 3,668
Profit for the period 24,450
Attributable to:
Equity holders of the parent 15,505
Minority interests 8,945
Comparing Tabreed to similar companies listed in the UAE is not easy, there are very few utilities company of a similar nature. Perhaps the energy companies like (TAQA) with a PE of only 4.3 for Q3, (AABAR) and (DANA) are less useful due to the nature of their operations (or lack of them in the case of Aabar).
The only other utilities companies I can think of that are listed in the UAE are the telecom companies, (ETISALAT) with a PE of 11.2, (DU) which only just turned a profit so PE of 135 is an unrealistic comparison, (QTEL) with a PE of 8.2, (PALTEL) with a PE of 9.2, and (SUDATEL) with a PE of 5.7 for Q2 (Q3 results not seen yet).
See the UAE stocks page with latest fundamental data which can be filtered by ESCA sector (I'll try to improve that with a longer list of more specific sectors). _________________ UAE IPO list | posting guidelines
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