Dubai’s leading operator of economic free zones, Tecom Group, announced solid financial results for the year 2023, highlighting strong business performance and growth. In a statement, Tecom reported achieving record revenue of Dh2.2 billion for 2023, representing a 10% increase year-on-year. This top-line growth translated to a net profit of Dh1.1 billion for the year, compared to Dh725 million in 2022.
Tecom Group manages over 10 economic zones and business districts in Dubai, including Dubai Internet City, Dubai Media City, Dubai Design District and Dubai Industrial City. High occupancy rates across its portfolio were a key driver of the company’s positive financial outcome in 2023. Average occupancy levels for the year stood at 89%, reflecting steady demand from businesses to set up operations within Tecom’s premier business hubs.
The statement noted that occupancy in industrial zones rose to 94% in 2023, up from 81% in the previous year, indicating growing interest from manufacturers and industrial enterprises. Premium office spaces in centrally located districts like D3 also witnessed strong uptake, with many local and multinational corporations choosing to locate in these vibrant business environments.
In total, Tecom was able to attract nearly 15% more new customers in 2023 compared to 2022, in addition to retaining most of its existing client base. This expansion of the tenant roster against the backdrop of high occupancy translated directly to higher rental and other revenue for the company. Tecom’s operating and financial costs declined as well through ongoing efficiency enhancement efforts.
A key development that aided Tecom’s bottom line was the successful refinancing of an existing Dh7.6 billion loan facility in June 2023. The refinancing was carried out at more favorable terms and lower interest rates, helping to reduce the group’s finance costs significantly in the second half of the year. As a result, Tecom’s net profit margin expanded to 76% for full-year 2023 from 68% in the previous year.
In light of its strong financial performance, Tecom’s board of directors approved a dividend payout of Dh400 million to shareholders for the second half of 2023. This latest distribution, to be made in April 2024, follows an identical dividend for the first six months. It underscores Tecom’s consistent policy of returning value to investors through regular dividend payments.
Commenting on the results, Tecom Group Chairman Malek Al Malek stated that the company was able to enhance its position as the preferred destination for global businesses and talent through its world-class infrastructure and offerings. He also noted that demand for Tecom’s assets remained robust, aided by Dubai’s business-friendly environment and strategic location. Tecom CEO Abdulla Belhoul reinforced optimism around continued momentum in 2024 and beyond.
In summary, Tecom Group delivered outstanding financial performance in 2023 backed by strong market fundamentals and prudent management. The results validate the attractiveness and resilience of Dubai’s real estate and business sectors. Looking ahead, Tecom is well-positioned to capitalize on growth opportunities and further maximize shareholder value through its diverse portfolio of premium economic zones.
