Revenue stood flat YoY, coming in line with our expectations
Tabreed’s revenue edged lower by 0.5% YoY in 1Q25, coming in line with our estimate. The company added 4,599 RT of new customer connections during the quarter, taking the total capacity to 1.33mn RT, matching our forecast. Consumption volume, however, decreased by 7% YoY due to relatively colder weather in 1Q25.
Net profit rises slightly YoY, matching our estimate
Operating profit edged down due to lower revenue and an increase in direct costs. Net profit, however, rose slightly by 2.9% YoY (-1.1% variance), helped by lower finance costs, and an increase in the share of JV and associates (+29% YoY).
Maintain target price
Considering an in-line financial performance and Tabreed’s growth prospects, we maintain our AED3.59 target price on its stock. The company inked a deal on 16 March to provide district cooling services to the Palm Jebel Ali project in Dubai, with a capacity of 250k RT, reflecting over 20% of its UAE’s current consolidated connected capacity. Currently, the stock trades at 12.4x FY25e EPS, below its 3-year average daily blended forward P/E of 13.6x.