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TECOM GROUP H1 2023 REVENUE SURPASSES AED 1 BILLION WITH
NET PROFIT UP 13% AS BOARD APPROVES AED 400 MILLION
INTERIM CASH DIVIDEND
• H1 2023 Revenue tops AED 1 billion, up 6% YoY, driven by 87% occupancy rate attributable to high
retention rate and adding more than 1,500 new customers
• H1 2023 Net Profit increased 13% YoY to AED 485 million on the back of strong top line growth across all
core business segments, enhanced operational efficiency, improved leverage position and lower cost of
debt
• H1 2023 EBITDA increased by 14% on improved operating efficiencies across the Group, a reflection of
improved revenue quality
• Continued year-on-year increase in funds from operations (FFO) to AED 678 million in H1 2023
• Recent refinancing of existing AED 7.6 billion loan facility at more favourable terms and lower interest
margin strengthens Group’s cash flow, lowers financial costs, and improves leverage position as well as its
profitability
• In line with Dividend Policy, Board of Directors approved an interim cash dividend payment of AED 400
million to be distributed in September 2023 based on H1 2023’s strong performance
Dubai, UAE, 1 August 2023 – TECOM Group PJSC (DFM: TECOM), (the “Company” or the “Group”), the
creator of specialised business districts and vibrant communities, today announced its financial results for
the second quarter (Q2) and first half of the year (H1) ending 30 June 2023. The Group delivered a strong
performance driven by sustained high occupancy levels across its diverse high-quality portfolio, reporting
a 6% year-on-year (YoY) increase in revenue to AED 1.05 billion and a 13% YoY increase in net profit to
AED 485 million in H1 2023.
Financial Highlights
AED ‘000s %Change %Change
H1 2023 H1 2022 Q2 2023 Q2 2022
(Unless otherwise stated) (YoY) (YoY)
Revenue 1,048,872 989,417 6% 535,088 504,306 6%
EBITDA 824,580 722,858 14% 425,775 373,423 14%
EBITDA Margin 79% 73% 6% 80% 74% 6%
Net Profit 484,501 427,533 13% 229,368 237,271 (3%)
Adjusted Net Profit* - - - 282,663 237,271 19%
*Excluding the one-off impact from fees associated with refinancing loan facility
Operational Highlights
Commercial and Industrial 30 June 2023 30 June 2022 YoY%
Occupancy Level 87% 82% 5%
Number of Customers +10,000 +8,500 18%Malek Al Malek, Chairman of the Board, TECOM Group, said: “TECOM Group continued to deliver
strong financial and operational performance owed to our dynamic strategy
which aims to further increase our occupancy levels across the portfolio while
also maintaining prudent capital management. Our performance was
underpinned by Dubai’s robust economy and its visionary leadership. On the
back of our exceptional results, I am pleased to announce that the Board has
approved an interim dividend distribution of AED 400 million to shareholders
for the first half of this year, to be distributed in September 2023.”
Abdulla Belhoul, Chief Executive Officer, TECOM Group, said: “Commercial real estate in Dubai is
growing at a steady pace owing to Dubai’s appeal as a global city to businesses,
talent and investors alike and to its macroeconomic resilience. Our robust
business model and our business districts’ market reputation have enabled
TECOM Group to capitalise on the strong demand, supporting our solid
performance during the period. The vast majority 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 bank to help unlock greater value for our shareholders.”
H1 2023 Financial Highlights
• Revenue in H1 2023 increased by 6% YoY to AED 1.05 billion, supported by the continued growth
in rental rates and the sustained strong occupancy level and customer retention rate across all
business districts.
o 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.
o The overall customer retention rate stood at 92% as of 30 June 2023.
o 18% YoY increase in number of customers, surpassing 10,000 customers including leading
multinational and regional companies.
o 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 AED 825 million, mainly driven by improved revenue quality and
enhanced management of operating expenses.
• Net profit grew by 13% YoY to AED 485 million, underpinned by strong top-line performance,
continued growth across all business segments, enhanced operational efficiencies, improved
leverage position and lower total financing cost.
• Funds from operations (FFO) stood at AED 678 million, representing an increase of 8% YoY, a
testament to improved revenue quality and operational efficiency across all income-generating
assets.Q2 2023 Financial Highlights
• Revenue in Q2 2023 increased by 6% YoY to AED 535 million and also registered a solid sequential
growth on the sustained demand across Group’s portfolio.
• EBITDA grew by 14% YoY to AED 426 million, impacted positively by ongoing efforts to reduce
operating expenses and drive operational efficiencies.
• Net profit for the three-month period increased by 19% YoY to AED 283 million, excluding the
impact of the one-off expense related to settling the old loan facility.
• The Group’s debt profile has improved with loan-to-value (LTV) ratio of 15% and a 5.7x EBITDA
to interest ratio, on the back of the immediate positive impact of the recent refinancing of the
existing AED 7.6 billion loan facility, which was refinanced at lower margins and more favourable
terms.
H1 2023 Key Business Highlights
TECOM Group has had a very active year across most of its business districts, a reflection of the 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 AED 1 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 (MoIAT), the Ministry of Climate Change and Environment (MOCCAE), the
Emirates Development Bank (EDB), and Dubai’s Department of Economy and Tourism (DET) to
support the sustainable development of the manufacturing sector in the UAE and strength its
position as an attractive global industrial hub.
H1 2023 Key ESG Highlights
During the first six months of the year the Group made good progress on several ESG matters, of note:
• Continued to deliver value to customers, with customer satisfaction levels increasing to 88.6% in
H1 2023 from 87.8% in FY 2022.
• Supporting 366 startups, as part of in5, up from 346 startups as at end of FY 2022.
• 9% of the energy consumption was generated by clean energy sources.
• 179 tonnes of waste was recycled across all business districts.
• Distributed 12,000 meals during holy month of Ramadan.
• 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.Dividend
During its meeting held on 1 August 2023, the Board of Directors approved the first interim dividend
payment of AED 400 million, which will be 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 AED 800
million per annum through September 2025.
---ENDS---
Note to Editors
Definitions
TECOM Group has an integrated portfolio of real estate assets, spread across 10 strategically located business districts
in Dubai. These business districts serve six industry sectors. We refer to each sector we serve as a Cluster, which
consists of one or more business districts operating in the same industry.
• Technology Cluster: Consists of Dubai Internet City and Dubai Outsource City.
• Media Cluster: Consists of Dubai Media City, Dubai Studio City and Dubai Production City.
• Education Cluster: Consists of Dubai International Academic City and Dubai Knowledge Park.
• Science Cluster: Consists of Dubai Science Park.
• Design Cluster: Consists of Dubai Design District.
• Manufacturing Cluster: Consists of Dubai Industrial City.
More broadly, the Group provides real estate solutions across three segments: Commercial Leasing, Land Leasing and
Industrial Leasing.
• Commercial Leasing. TECOM Group provides state of the art built-to-lease (BTL) and built-to-suit (BTS)
properties across office and retail spaces including purpose-built business centres and HQs tailored to
customer specifications as well as industry specialised facilities (e.g. sound stages, film studios, university
campuses, lab facilities, etc.). Typically, BTL properties have a lease term of one to five years and BTS
properties have lease terms of 10 years and over.
• Industrial Leasing. Warehouse space, showrooms and worker accommodation facilities utilised by large
corporates and other businesses to accommodate their employees. Typically, lease terms for Industrial
Leasing are one to five years.
• Land Leasing. Available land within our various business districts for which infrastructure (e.g. roads, water,
electricity, sewage) is already in place or will be put in place allowing us to lease the land or utilise it for our
planned future investments. Typically, lease terms for Land Leasing are between 30 to 50 years.
TECOM Group also provides an array of value-added government and business services (e.g. visa, immigration,
licensing, etc.) including services promoting individual talent, startups and entrepreneurship through our dedicated
platforms axs, in5, gofreelance, marketplace.ae and D/Quarters respectively, as well as advertising, property and venue
management services specific to each industry/district. Collectively, we refer to these services as Services & Others.
MEDIA ENQUIRIES INVESTOR RELATIONS ENQUIRIES
TECOM Group Mutaz Albadri Ghaith Zghaibi
media@tecomgroup.ae ir@tecomgroup.ae
Brunswick Group tecomgroup@brunswickgroup.comFFIINNAANNCCIIAALL HHIIGGHHLLIIGGHHTTSS
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Sentiment: positive