Emirates Central Cooling Systems Corporation PJSC (DFM: EMPOWER) (ISIN – AEE01134E227), the world’s leading district cooling services provider, has disclosed its financial performance for the fiscal year 2023. Impressively, the company achieved a historic revenue of AED 3.035 billion, marking a substantial growth of 8.7% in comparison to the previous year, 2022. Notably, Empower has reported a net profit of AED 960 million for the fiscal year.
In an official press statement, Empower has put forth a proposal for a final dividend amounting to AED 425 million for the year 2023. The compensation is anticipated to be allocated to the company’s shareholders by April 2024. This financial achievement underscores Empower’s robust performance and strategic prowess in the district cooling sector.
In the fiscal year 2023, Empower witnessed substantial growth in both revenue and EBITDA, with a remarkable 8.7% and 6.2% increase, respectively. The pro forma Net Profit also displayed noteworthy growth, surging by 6.1% to reach AED 1,083 million. This pro forma Net Profit comparison is adjusted to account for pre-IPO leverage, providing a clear view of comparable performance. On an absolute basis, Empower conveyed vigorous net proceeds of AED 960 million for the year 2023. These financial indicators underscore Empower’s strong performance and financial resilience in the market.
Empower’s operational prowess is evident in its exceptional performance metrics. As of the end of 2023, the number of buildings served by Empower’s district cooling services surged to 1522, reflecting a noteworthy 4% increase compared to the previous year, 2022. Simultaneously, the total length of the district cooling pipeline network surpassed 398 kilometers, marking a substantial 4.7% growth compared to the figures reported in 2022. These achievements underscore Empower’s commitment to expanding and enhancing its district cooling infrastructure for the benefit of its growing clientele.
In 2023, Empower paid a cash compensation totaling AED 850 million, distributed across two equal installments of AED 425 million each in April and October. This dividend distribution signifies Empower’s adherence to its pledge of semi-annual dividend payments, amounting to a cumulative value of AED 850 million annually for the initial two fiscal years after its listing on the Dubai Financial Market.
Following the dedicated dividend disbursements for the initial two fiscal years after the IPO, the company anticipates providing a sustainable dividend aligned with the ongoing growth of the business.
Ahmad bin Shafar, CEO of Empower, expressed, “The remarkable financial achievements of Empower underscore the steadfast confidence of both shareholders and consumers, reinforcing its standing as a trusted industry leader.”
He highlighted that in 2023, the company showcased impressive adaptability and a keen ability to learn, effectively turning challenges into opportunities for future growth and prosperity.
Bin Shafar clarified that Empower’s strategy of planning to provide district cooling services allowed it to adeptly manage the swift advancements in the real estate sector. This sector observed the culmination of different assignments and the initiation of a diverse array of multi-use projects.
“Our skilled teams, coupled with these assets and our dedication to investing in cutting-edge technologies and contemporary cooling facilities throughout Dubai, collectively form robust foundations for an unparalleled business model. This model facilitates consistent growth in revenue and profit, while concurrently providing environmental advantages that play a role in safeguarding our climate and natural resources.”
Expansion of Business
In 2023, Empower successfully finalized several Master Development Agreements with prominent real estate developers in Dubai. Of significant note is the agreement inked with Dubai Maritime City (DMC), wherein Empower commits to delivering cooling services to DMC, boasting a total capacity exceeding 63,000 refrigeration tons. Empower is set to construct district cooling infrastructure, encompassing two plants and the associated distribution network, to service a total of 43 existing and forthcoming buildings within the DMC development.
The district cooling project will be executed in two distinct phases. Empower officially declared the successful completion of all operations to integrate the ‘Anwa’ residential tower within the DMC development into its district cooling services network in 2023. This integration boasts a total capacity of 1,260 refrigeration tons.
Empower has successfully finalized an agreement with Sobha Properties, a prominent luxury real estate development firm in the UAE. This collaboration involves providing environmentally friendly district cooling services for the Sobha Hartland project, boasting a cooling capacity of up to 17,000 refrigeration tons. Under the terms of the agreement, Empower is set to deliver world-class district cooling services to eight buildings within the Sobha Hartland, originating from the Meydan Plant and facilitated by the expansion of the associated pipeline network.
In 2023, Empower initiated its service provision to Dubai International Airport, one of the globe’s most bustling airports. With a substantial total capacity of 110,000 refrigeration tons (RT) valued at AED 1.1 billion, five district cooling plants and associated assets were seamlessly integrated into Empower’s operational, production, distribution, and administrative systems as part of the agreement.
In 2023, Empower successfully concluded the qualitative expansion and enhancement of the district cooling infrastructure in the Business Bay region. This area is home to the world’s largest urban district cooling systems, boasting a total capacity of 450,000 refrigeration tons (RT) distributed across six district cooling plant rooms and ten thermal energy storage (TES) tanks, encompassing both existing and forthcoming facilities.
In 2023, Empower’s portfolio experienced notable growth as it extended district cooling services to a comprehensive total of 1,522 buildings, spanning various sectors within the Emirate of Dubai. Residential buildings constitute the majority, comprising 64% of the total, followed by 15% for commercial and office buildings. The hotel and hospitality sector makes up 14%, with Empower catering to 21% of Dubai’s hotels, totaling 821. Three percent goes towards the health sector; the remaining four percent is split between retail malls, entertainment venues, and other industries.
Bin Shafar affirmed that the company continues its dedication to bolstering diverse sectors throughout Dubai in its initiatives for carbon reduction, aligning seamlessly with the Emirate’s vision for a green economy and sustainable development.
Cooling Infrastructure Facilities
Empower initiated the operation of its latest district cooling facility in the Dubai Land Residence Complex (DLRC), boasting a production capacity of 47,000 refrigeration tons. This facility is dedicated to serving the residents of DLRC, an esteemed residential destination in Dubai.
Throughout the year, Empower initiated a significant upgrade project for its Jumeirah Beach Residence (JBR) district cooling plant. The endeavor involves outfitting the plant with state-of-the-art, innovative technologies, and a contract valued at AED 102 million was awarded for its implementation. The JBR plant currently caters to 76 towers, 9,000 residences, and 2,000 hotel units. The modernization project is anticipated to reach completion by 2025.
In the previous year, the company granted a series of contracts for the construction of an advanced next-generation district cooling plant and the expansion of the district cooling pipeline network in the Jumeirah Beach Hills area.
The expansion initiative is set to deliver an overall cooling capacity of 48,000 refrigeration tons (RT) and will cater to esteemed residential and tourist hubs across the Emirates. Notable landmarks such as the Burj Al Arab, Jumeirah Beach Hotel, Marsa Al-Arab, Madinat Jumeirah Living, Madinat Jumeirah, Jumeirah Al-Naseem Hotel, and various other architectural icons in Dubai will benefit from this project.
In May 2023, Empower disclosed the initiation of construction for reverse osmosis plants within three of its eight district cooling facilities in Palm Jumeirah. This strategic move is a testament to the company’s commitment to optimizing fresh water usage in district cooling operations, by the goals outlined in the Dubai Demand Side Management Strategy. This strategy targets a 30% reduction in water consumption by the year 2030.
Empower has restated its dedication to strategic investments geared towards expanding operations in Dubai and elevating its operational standards. This commitment is propelled by the company’s focus on modernization and the advancement of its infrastructure and technical workforce. The objective is to adeptly meet the escalating demand for the company’s services from individuals, institutions, and businesses. Noteworthy is Empower’s current dominant position, exceeding 80%, in the district cooling market within Dubai.