TECOM Group (TECOM) Q2 2024 earnings summary

Executive summary

• H1 2024 revenue reached AED 1,148 million, up 9% year-over-year, with net profit at AED 603 million, a 24% increase compared to H1 2023.

• Q2 2024 revenue was AED 584 million, up 9% year-over-year, and net profit was AED 311 million, up 35% year-over-year.

• Consolidated occupancy (excluding land leasing) stood at 92%, with a weighted average lease term of 2.4 years.

• Portfolio valuation increased to AED 22.93 billion, up 7.7% from 2022.

• Interim cash dividends of AED 400 million were recommended, following a final dividend of AED 400 million earlier in the year.

Financial highlights

• H1 2024 EBITDA was AED 896 million, up 9% year-over-year, with an EBITDA margin of 78%.

• Funds from operations (FFO) for H1 2024 were AED 840 million, up 24% year-over-year.

• Free cash flow improved due to lower capex and better collections; available liquidity includes AED 2.9 billion undrawn facility.

• Net debt to LTM EBITDA ratio at 1.6x; loan to value (LTV) ratio at 11.8%.

• Basic and diluted EPS for the six months was AED 0.12, up from AED 0.10 in the prior year.

Outlook and guidance

• 2024 revenue growth guidance at 9% year-over-year, with EBITDA expansion of 7% year-over-year.

• Focus on optimizing core business, refining pricing, and expanding business intelligence tools.

• The Group expects to recognize AED 45.9 million in revenue from unsatisfied performance obligations over the next two years.

• Continued development of new products and support for Dubai’s economic growth.