National Central Cooling Co., popularly known as Tabreed, has demonstrated its robust financial health with the release of its consolidated financial results for the first nine months of 2024. The UAE-based district cooling giant has reported a 6% year-on-year increase in consumption volumes, contributing to a 4% rise in normalized net profit before tax, reaching AED 462 million.

The company's revenue surged to AED 1.85 billion during this period, driven by a strategic increase in consumption and the addition of 29,000 Refrigeration Tons (RT) of new connections over the past year. Tabreed's EBITDA also saw a healthy increase to AED 933 million, maintaining a stable EBITDA margin of 50%, which highlights the sustainable nature of its business model.

New connections gathered momentum in the third quarter, with 12,444 RT added, a significant increase compared to the 4,646 RT connected in the first half of the year. The company continued its international expansion strategy, adding 3,000 RT in India and 1,500 RT in Egypt, thereby reinforcing its presence in these emerging markets.

Tabreed's strong cash flow generation is evident with free cash flows of AED 912 million over the past 12 months, translating to a yield of over 10%. The company has prudently utilized its surplus cash to reduce debt by 12% in the first nine months of the year, strengthening its balance sheet and maintaining a net debt to EBITDA ratio of 4.0x. This commitment to financial prudence supports Tabreed's 'investment grade' credit rating.

In addition to its financial achievements, Tabreed actively promoted district cooling awareness by sponsoring and participating in the Asia Urban Energy Assembly in Bangkok, aligning with its ambitions to explore opportunities across Southeast Asia.

Given Tabreed's strong financial performance, strategic expansions, and commitment to maintaining a healthy balance sheet, the company's stock appears to be a solid investment. Investors may consider a 'buy' recommendation, as Tabreed's growth trajectory and international expansion efforts suggest a promising future.