UAE industrial cooling firm Tabreed posted a 21 percent drop in quarterly net profit, but said it was confident it would meet its financial obligations amid auditor concerns over its liabilities.
The Dubai-listed company, also known as the National Cooling Co, posted a first-quarter profit of AED31.9m ($8.7m).
Tabreed is among a number of Gulf companies which had to restructure its debt after an economic boom, fuelled by record-high oil prices and easy credit, ended abruptly and caused a property market crash.
In February, Tabreed secured a deal with creditors to refinance AED2.63bn in debt through an injection of funds by Abu Dhabi-owned fund Mubadala.
Revenue climbed 23 percent to AED246.6m.
“The first three months of 2011 have been extremely positive for Tabreed,” Sujit Parhar, Tabreed’s chief executive officer said in a statement. “I am pleased to report that we remain profitable, continue to improve margins and look forward to delivering successfully on our business plan in the year ahead.”
Auditors said, however, that current liabilities exceeded its current assets by AED2.6bn, while accumulated losses of AED972m amounted to 400 percent of its issued share capital as of March 31.
“The above factors indicate the existence of a material uncertainty which may cast significant doubt about the group’s ability to continue as a going concern,” Tabreed quoted auditors in the statement.
Tabreed said the deal, which includes AED3.1bn of committed long term capital from Mubadala, and expected profitability and operating cash flows in 2011 will cover funding requirements up to December 31, 2011.
“Given the completion of the recapitalisation, the group’s management and board of directors are confident that the capital structure of the group ensures the long terms stability of the business,” the statement said.
The company’s chilled water revenue climbed to AED183m from AED139m in the same period last year while revenue from its contracting segment jumped to AED64.1m from AED32m. ($1=AED3.673)
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