Tabreed Net Profit Falls 24% as Financing Costs Offset Revenue Growth

Tabreed's net profit fell 24% to AED 320 million ($87.1 million) in the first nine months of 2026, down from AED 420 million ($114.4 million) a year earlier, the Dubai Financial Market-listed district cooling company said on Friday.

Revenue rose 3% to AED 1.91 billion ($520.8 million), helped by higher fixed-capacity charges, acquisitions and growth across its district cooling businesses. Those gains did not reach the bottom line. Higher financing costs tied to debt refinancing and growth investments cut into earnings, and the initial contribution from the PAL Cooling joint venture also weighed on profit.

EBITDA slipped 2% to AED 955 million ($260 million) from AED 972 million ($264.7 million), a margin of roughly 50%. General and administrative expenses climbed.

Cash generation moved the other way. Net operating cash flow rose 20% to AED 882 million ($240.2 million) from AED 736 million ($200.4 million), a cash conversion rate of 92%. Net debt stood at 4.6 times EBITDA at September 30. Tabreed holds investment-grade ratings from Moody's and Fitch.

The company paid an interim dividend of 5 fils per share in September, equal to 74% of first-half net profit.

Connected cooling capacity grew 15% year on year to 1.59 million refrigeration tons at the end of September, an increase driven by PAL Cooling. Organic additions over the previous 12 months came to 19,900 refrigeration tons. Cooling consumption volumes edged up 0.5% across the nine months, though the third quarter alone ran 3% higher than a year earlier.

Chairman Bakheet Al Katheeri said the focus was on integrating newly acquired assets while maintaining operational efficiency and financial flexibility.

Founded in 1998, Tabreed builds and operates centralised cooling plants for residential, commercial and industrial developments, and has put money into geothermal cooling, solar power and nanofluids to cut energy use. The tension in these results is familiar for an asset-heavy utility growing by acquisition: capacity and cash flow can rise while depreciation and interest charges take a larger share of profit. PAL Cooling widened the portfolio and strengthened the company's standing in the UAE cooling market, but the financing behind it now shows in the earnings line.

Al Katheeri ranked 20th on a Top 100 CEOs 2026 list and second in the investment and holdings category of a Middle East sustainability leaders 2026 ranking, recognition tied to his leadership at Mubadala. Chief executive Yousif Al Hammadi placed seventh in the energy and utilities category of that same sustainability ranking.

Tabreed's market capitalisation is close to $1.8 billion (AED 6.46 billion). Its shares traded at AED 2.27 ($0.62) at 1:16 pm AST on Friday.