Half Year 2026 National Central Cooling Co PJSC Earnings Call

August 11, 2026

Operator: Good afternoon, everyone, and welcome to Tabreed's Q2 2026 earnings conference call on 11 August 2026. Please note that the call today is being recorded and all participants are on listen-only mode. After the presentation is completed, there will be an opportunity to ask questions. Without further ado, I would now like to pass the line over to Mr. Yugesh Suneja, the Head of Investor Relations at Tabreed. Please go ahead, sir.

Speaker #1: Good afternoon, everyone, and welcome to Tabreed’s second quarter 2026 earnings conference call on the 11th of August, 2026. Please note that the call today is being recorded, and all participants are on listen-only mode.

Speaker #1: After the presentation is completed, there will be an opportunity to ask questions. So, without further ado, I would now like to pass the line over to Mr. Yugay Suneja, the Head of Investor Relations at Tabreed.

Speaker #1: Please go ahead, sir.

Speaker #2: Thank you, Michael. Good afternoon, everyone, and welcome to Tabreed's first half of 2026 results conference call. As Michael pointed out, I am Yugay, Head of Investor Relations at Tabreed.

Yugesh Suneja: Thank you, Michael. Good afternoon, everyone, and welcome to Tabreed's H1 2026 results conference call. As Michael pointed, I am Yugesh, Head of Investor Relations at Tabreed. On today's call, we will review the H1 key highlights, discuss the factors shaping our performance, and share management's view on current operating environment and outlook. Our agenda for today is outlined on the next slide. We will begin with key business and financial highlights, which will be presented by our CFO, Adel Al Wahedi. This will be followed by a more detailed review of the financial results by our SVP Finance, Salim Malek. Our CFO will then return to provide an update on our guidance and outlook before we open the line for Q&A.

Speaker #2: On today's call, we will review the first half's key highlights, discuss the factors shaping our performance, and share management's view on the current operating environment and outlook.

Speaker #2: Our agenda for today is outlined on the next slide. We will begin with key business and financial highlights, which will be presented by our CFO, Adil Alvahedi, who will be followed by a more detailed review of the financial results by our SVP of Finance, Salih Malik.

Yugesh Suneja: Our agenda for today is outlined on the next slide. We will begin with key business and financial highlights, which will be presented by our CFO, Adel Al Wahedi. This will be followed by a more detailed review of the financial results by our SVP Finance, Salik Malik. Our CFO will then return to provide an update on our guidance and outlook before we open the line for Q&A.

Speaker #2: Our CFO will then return to provide an update on our guidance and outlook before we open the line for Q&A. Now, before we move forward with the presentation, I would like to draw your attention to the forward-looking statements disclaimer, which is presented on the next slide.

Yugesh Suneja: Now, before we move forward with the presentation, I would like to draw your attention to the forward-looking statements disclaimer, which is presented on the next slide. During today's call, certain statements may be forward-looking in nature and are based on our current expectations and assumptions. These statements are subject to risks and uncertainties that could cause actual results to differ from our expectations. Please refer to the disclosure on this slide for further information. With that, let me hand the call over to Adel, who will walk you through the key highlights of the period.

Speaker #2: During today's call, certain statements may be forward-looking in nature and are based on our current expectations and assumptions. These statements are subject to risks and uncertainties that could cause actual results to differ from our expectations.

Speaker #2: Please refer to the disclosure on this slide for further information. With that, let me hand the call over to Adil, who will walk you through the key highlights of the period.

Adel Salem Al Wahedi: Good afternoon, everyone, and thank you for joining us today. The H1 2026 demonstrated the resilience of our operating platform with stable service delivery, high network availability, and continued focus on sustainable cooling. Over the past 12 months, we added nearly 212,000 RTs of district cooling capacity, bringing total connected capacity to 1.58 million RTs, a 15% year-on-year increase. This growth was mainly driven by the PAL Cooling acquisition completed in Q4 2025. We also continued to progress our organic growth pipeline with investments focused primarily on expanding capacity in our core UAE market. Group revenue rose 2% year-on-year to AED 1.13 billion, supported by higher fixed capacity revenue and contributions from our value chain business. EBITDA reached AED 615 million with 55% margin, reflecting healthy underlying operations.

Adel Al Wahedi: Good afternoon, everyone, and thank you for joining us today. The H1 2026 demonstrated the resilience of our operating platform with stable service delivery, high network availability, and continued focus on sustainable cooling. Over the past 12 months, we added nearly 212,000 RTs of district cooling capacity, bringing total connected capacity to 1.58 million RTs, a 15% year-on-year increase. This growth was mainly driven by the PAL Cooling acquisition completed in Q4 2025. We also continued to progress our organic growth pipeline with investments focused primarily on expanding capacity in our core UAE market. Group revenue rose 2% year-on-year to AED 1.13 billion, supported by higher fixed capacity revenue and contributions from our value chain business. EBITDA reached AED 615 million with 55% margin, reflecting healthy underlying operations.

Speaker #3: Good afternoon, everyone, and thank you for joining us today. The first half of 2026 demonstrated the resilience of our operating platform, with stable service delivery, high network availability, and a continued focus on sustainable cooling.

Speaker #3: Over the past 12 months, we added nearly 212,000 RTs of district cooling capacity, bringing total connected capacity to 1.58 million RTs—a 15% year-on-year increase.

Speaker #3: This growth was mainly driven by the PAL Cooling acquisition, completed in the fourth quarter of 2025. We also continued to progress our organic growth pipeline with investments focused primarily on expanding capacity in our core UAE market.

Speaker #3: Group revenue rose 2% year-on-year to AED 1.13 billion, supported by higher fixed capacity revenue and contributions from our value chain business. EBITDA reached AED 615 million, with a 55% margin.

Speaker #3: Reflecting healthy underlying operations, our asset base is underpinned by long-term contracts with highly creditworthy customers, providing strong revenue visibility and stable, recurring cash flows.

Adel Salem Al Wahedi: Our asset base is underpinned by long-term contracts with highly creditworthy customers, providing strong revenue visibility and stable recurring cash flows. This was reflected in another period of robust cash generation with net operating cash flow up to 40% year-on-year, supported by improved cash conversions and efficient working capital management. Operating profit and net profit reflect a more normalized cost base compared with the prior year. Finance costs also increased following the refinancing of debt facilities at prevailing market rates at the start of last year, while debt levels rose in line with the current investment cycle. These factors are transitional. As operational capacity ramps up and acquisition synergies are gradually realized, we expect a positive incremental contribution to earnings. Our balance sheet remains strong. Net Debt to EBITDA improved to 4.57x multiples at period end, supported by robust cash flows.

Adel Al Wahedi: Our asset base is underpinned by long-term contracts with highly creditworthy customers, providing strong revenue visibility and stable recurring cash flows. This was reflected in another period of robust cash generation with net operating cash flow up to 40% year-on-year, supported by improved cash conversions and efficient working capital management. Operating profit and net profit reflect a more normalized cost base compared with the prior year. Finance costs also increased following the refinancing of debt facilities at prevailing market rates at the start of last year, while debt levels rose in line with the current investment cycle. These factors are transitional. As operational capacity ramps up and acquisition synergies are gradually realized, we expect a positive incremental contribution to earnings. Our balance sheet remains strong. Net Debt to EBITDA improved to 4.57x multiples at period end, supported by robust cash flows.

Speaker #3: This was reflected in another period of robust cash generation, with net operating cash flow up 40% year-on-year, supported by improved cash conversions and efficient working capital management.

Speaker #3: Operating profit and net profit reflect a more normalized cost base compared with the prior year. Finance costs also increased, following the refinancing of debt facilities at prevailing market rates at the start of last year, while debt levels rose in line with the current investment cycle.

Speaker #3: These factors are transitional as operational capacity ramps up and acquisition synergies are gradually realized. We expect a positive incremental contribution to earnings. Our balance sheet remains strong; net debt to EBITDA improved to 4.57x at period end, supported by robust cash flows.

Adel Salem Al Wahedi: The strength, resilience, and predictability of our business model continue to be recognized through our investment-grade credit rating from both Moody's and Fitch. The board's approval of an interim dividend of 5 fils for H1 2026 reinforces our confidence in the business recurring cash flows while maintaining prudent approach to preserving our investment-grade credit profile. Let me now turn to the next slide for business updates. This slide summarizes the operating performance of our core chilled water business. Over the past 12 months, we added nearly 190,000 RTs through the PAL Cooling acquisition, completed in Q4 2025, alongside 21,000 RTs of organic additions. Additions in H1 were lower, mainly due to the phasing of customer projects, with some handover dates shifting to later periods as development schedules changed.

Adel Al Wahedi: The strength, resilience, and predictability of our business model continue to be recognized through our investment-grade credit rating from both Moody's and Fitch. The board's approval of an interim dividend of 5 fils for H1 2026 reinforces our confidence in the business recurring cash flows while maintaining prudent approach to preserving our investment-grade credit profile. Let me now turn to the next slide for business updates. This slide summarizes the operating performance of our core chilled water business. Over the past 12 months, we added nearly 190,000 RTs through the PAL Cooling acquisition, completed in Q4 2025, alongside 21,000 RTs of organic additions. Additions in H1 were lower, mainly due to the phasing of customer projects, with some handover dates shifting to later periods as development schedules changed.

Speaker #3: The strength, resilience, and predictability of our business model continue to be recognized through our investment-grade credit rating from both Moody's and Fitch. The board's approval of an interim dividend of 5 fils for the first half of 2026 reinforces our confidence in the business's recurring cash flows, while maintaining a prudent approach to preserving our investment-grade credit profile.

Speaker #3: Let me now turn to the next slide for business updates. This slide summarizes the operating performance of our core Chilled Water business. Over the past 12 months, we added nearly 190,000 RTs through the PAL Cooling acquisition, completed in the fourth quarter of 2025, alongside 21,000 RTs of organic additions.

Speaker #3: Additions in the first half were lower, mainly due to the phasing of customer projects, with some handover dates shifting to later periods as development schedules changed.

Adel Salem Al Wahedi: While this has moderated the pace of new customer connections, we continue to expect these projects to be delivered over time. Cooling volumes in Q2 were affected by weather conditions and lower occupancy compared with Q2 of last year. Lower wet bulb temperature, fewer cooling degree hours, and fewer extreme heat days reduced consumption volumes. Lower tourism flows and hospitality occupancy also had a marginal impact, given our limit exposure to the sector. As a result, consolidated consumption volumes declined 7.1% year-on-year in Q2 of this year. For H1 of this year, volumes declined 2.3% year-on-year, following strong growth in Q1. Let me now turn to the next slide. Turning now to capital allocation and shareholder returns. For H1 of this year, the board of directors approved an interim cash dividend of AED 0.04 per share.

Adel Al Wahedi: While this has moderated the pace of new customer connections, we continue to expect these projects to be delivered over time. Cooling volumes in Q2 were affected by weather conditions and lower occupancy compared with Q2 of last year. Lower wet bulb temperature, fewer cooling degree hours, and fewer extreme heat days reduced consumption volumes. Lower tourism flows and hospitality occupancy also had a marginal impact, given our limit exposure to the sector. As a result, consolidated consumption volumes declined 7.1% year-on-year in Q2 of this year. For H1 of this year, volumes declined 2.3% year-on-year, following strong growth in Q1. Let me now turn to the next slide. Turning now to capital allocation and shareholder returns. For H1 of this year, the board of directors approved an interim cash dividend of AED 0.04 per share.

Speaker #3: While this has moderated the pace of new customer connections, we continue to expect these projects to be delivered over time. Cooling volumes in the second quarter were affected by weather conditions and lower occupancy compared with the second quarter of last year.

Speaker #3: Lower wet bulb temperatures, fewer cooling degree hours, and fewer extreme heat days reduced consumption volumes. Lower tourism flows and hospitality occupancy also had a marginal impact, given our limited exposure to the sector.

Speaker #3: As a result, consolidated consumption volumes declined 7.1% year-on-year in Q2 of this year. For the first half of this year, volumes declined 2.3% year-on-year, following strong growth in the first quarter.

Speaker #3: Let me now turn to the next slide. Turning now to capital allocation and shareholder returns. For the first half of this year, the Board of Directors approved an interim cash dividend of 4 fils per share.

Speaker #3: This represents a payout ratio of 73% of normalized net profit, in line with our historical average. We are currently evaluating several projects that may require future capital deployment.

Adel Salem Al Wahedi: This represents a payout ratio of 73% of normalized net profit, in line with our historical average. We are currently evaluating several projects that may require future capital deployment. Maintaining the payout ratio at historical levels reflects our continued commitment to delivering healthy shareholder returns while preserving the financial flexibility needed to support future growth opportunities and maintain our investment-grade profile, which remains a strategic priority. With that, I will now hand over to Salim to take you through the detailed financial results.

Adel Al Wahedi: This represents a payout ratio of 73% of normalized net profit, in line with our historical average. We are currently evaluating several projects that may require future capital deployment. Maintaining the payout ratio at historical levels reflects our continued commitment to delivering healthy shareholder returns while preserving the financial flexibility needed to support future growth opportunities and maintain our investment-grade profile, which remains a strategic priority. With that, I will now hand over to Salik to take you through the detailed financial results.

Speaker #3: Maintaining the payout ratio at historical levels reflects our continued commitment to delivering healthy shareholder returns, while preserving the financial flexibility needed to support future growth opportunities and maintain our investment-grade profile, which remains a strategic priority.

Speaker #3: With that, I will now hand over to Salek to take you through the detailed financial results.

Salim Malek: Thank you, Adel. Good afternoon, everyone. I'll now walk you through the detailed financial results for H1 2026. The key takeaway is that the underlying business continues to perform as expected, demonstrating the stability, predictability, and resilience that characterize our operating model. Revenue growth was supported by higher fixed capacity revenue and a strong contribution from the value chain businesses. The increase in fixed revenue highlights the strength of our predominantly contracted and long-term nature of our revenue base. On cost, operating costs, including depreciation and amortization, rose by approximately 4% to AED 600 million, largely tied to value chain growth and higher O&M costs. The G&A expenses of AED 162 million were up 17%, mainly reflecting normalized timing of these expenses being recognized, including the personal cost and the business development activity that we are into.

Salik Malik: Thank you, Adel. Good afternoon, everyone. I'll now walk you through the detailed financial results for H1 2026. The key takeaway is that the underlying business continues to perform as expected, demonstrating the stability, predictability, and resilience that characterize our operating model. Revenue growth was supported by higher fixed capacity revenue and a strong contribution from the value chain businesses. The increase in fixed revenue highlights the strength of our predominantly contracted and long-term nature of our revenue base. On cost, operating costs, including depreciation and amortization, rose by approximately 4% to AED 600 million, largely tied to value chain growth and higher O&M costs. The G&A expenses of AED 162 million were up 17%, mainly reflecting normalized timing of these expenses being recognized, including the personal cost and the business development activity that we are into.

Speaker #2: Thank you, Adil. Good afternoon, everyone. I'll now walk you through the detailed financial results for the first half of 2026. The key takeaway is that the underlying business continues to perform as expected, demonstrating the stability, predictability, and resilience that characterize our operating model.

Speaker #2: Revenue growth was supported by higher fixed capacity revenue and a strong contribution from the value chain businesses. The increase in fixed revenue highlights the strength of our predominantly contracted and long-term nature of our revenue base.

Speaker #2: Regarding costs, operating expenses including depreciation and amortization rose by approximately 4% to 600 million dirhams, largely tied to value chain growth and higher O&M costs.

Speaker #2: The G&A expenses of 162 million were up 17%, mainly reflecting normalized timing of these expenses being recognized, including the personnel cost and the business development activity that we are into.

Salim Malek: EBITDA of AED 615 million was down by 2%, and our EBITDA margins remained healthy at around 55%, reflecting the robustness of our core operations. Profitability remained healthy, with a margin of 55% on EBITDA, and our below-the-EBITDA movements in net profit were driven primarily by non-operational items. As a result, net profit to the parent company was around AED 192 million, and the normalized net profit is around AED 194 million, down 29%, which I will take you through these bridges, including the share of results from our JVs and associates in more detail in the following slides. Overall, business continues to show steady top-line growth, with earnings expected to normalize progressively as new capacity becomes fully operational. Moving on to the next slide, we now look into the revenue performance.

Salik Malik: EBITDA of AED 615 million was down by 2%, and our EBITDA margins remained healthy at around 55%, reflecting the robustness of our core operations. Profitability remained healthy, with a margin of 55% on EBITDA, and our below-the-EBITDA movements in net profit were driven primarily by non-operational items. As a result, net profit to the parent company was around AED 192 million, and the normalized net profit is around AED 194 million, down 29%, which I will take you through these bridges, including the share of results from our JVs and associates in more detail in the following slides. Overall, business continues to show steady top-line growth, with earnings expected to normalize progressively as new capacity becomes fully operational. Moving on to the next slide, we now look into the revenue performance.

Speaker #2: EBITDA of $615 million was down by 2%, and our EBITDA margins remained healthy at around 55%, reflecting the robustness of our core operations.

Speaker #2: Profitability remained healthy, with a margin of 55% on EBITDA. Our below-the-EBITDA movements in net profit were driven primarily by non-operational items, as a result.

Speaker #2: Net profit to the parent company was around 192 million dirhams, and the normalized net profit is around 194 million dirhams, down 29%. I will take you through these bridges, including the share of results from our JVs and associates, in more detail in the following slides.

Speaker #2: Overall, business continues to show steady top-line growth, with earnings expected to normalize progressively as new capacity becomes fully operational. Now, moving on to the next slides, we look into the revenue performance: the group revenue increased 2% year over year to AED 1.13 billion in the first half of this year.

Salim Malek: The group revenue increased 2% year over year to AED 1.13 billion in the H1 of this year. Our core chilled water segment, which remains the core of the business, was stable, while the value chain businesses, representing 5% of the total H1 revenue, delivered strong growth of 53%. Within chilled water, fixed revenue rose to 2.8% year over year in the H1. This was supported by around 20,000 tons of organic capacity additions consolidated over the past 12 months, together with the CPI indexation of 1.2% from the start of 2026. The increase was partly offset by the amortization of finance lease assets and the lower CPI gains compared to the 2025, wherein the CPI was 1.67%. Consumption revenue, which typically accounts for around 40% of our chilled water revenue, declined by 2.3% during the H1.

Salik Malik: The group revenue increased 2% year over year to AED 1.13 billion in the H1 of this year. Our core chilled water segment, which remains the core of the business, was stable, while the value chain businesses, representing 5% of the total H1 revenue, delivered strong growth of 53%. Within chilled water, fixed revenue rose to 2.8% year over year in the H1. This was supported by around 20,000 tons of organic capacity additions consolidated over the past 12 months, together with the CPI indexation of 1.2% from the start of 2026. The increase was partly offset by the amortization of finance lease assets and the lower CPI gains compared to the 2025, wherein the CPI was 1.67%. Consumption revenue, which typically accounts for around 40% of our chilled water revenue, declined by 2.3% during the H1.

Speaker #2: Our core Chilled Water segment remain, which remains the core of the business, was stable while the value chain businesses representing 5% of the total first half revenue delivered strong growth of 53%.

Speaker #2: Within Chilled Water, fixed revenue rose by 2.8% year over year in the first half. This was supported by around 20,000 tons of organic capacity additions consolidated over the past 12 months.

Speaker #2: Together with the CPI indexation of 1.2% from the start of 2026, the increase was partly offset by the amortization of finance lease assets and the lower CPI gains compared to 2025, wherein the CPI was 1.67%.

Speaker #2: Consumption revenue, which typically accounts for around 40% of our chilled water revenue, declined by 2.3% during the first half. As Adil mentioned earlier, consumption was mainly affected by weather patterns, with some impact from lower occupancy in Q2.

Salim Malek: As Adel had mentioned earlier, consumption was mainly affected by weather patterns, with some impact from lower occupancy in Q2. The seasonality chart on the bottom right shows that Q2 is usually the second highest quarter for consumption. As a result of this seasonality and the Q2 weather impact, chilled water revenue for the quarter declined 3% year over year. In the value chain business, growth during the period was mainly driven by our manufacturing arm of pre-insulated piping company, which delivered a large contract during the quarter. Tasleem, our billing and collection division also recorded stronger growth as it continued to onboard new third-party customers. Moving on to the next slide, talking about the profitability, gross profit remained stable year over year, and that it can be demonstrated during the H1 of 2026 at AED 528 million.

Salik Malik: As Adel had mentioned earlier, consumption was mainly affected by weather patterns, with some impact from lower occupancy in Q2. The seasonality chart on the bottom right shows that Q2 is usually the second highest quarter for consumption. As a result of this seasonality and the Q2 weather impact, chilled water revenue for the quarter declined 3% year over year. In the value chain business, growth during the period was mainly driven by our manufacturing arm of pre-insulated piping company, which delivered a large contract during the quarter. Tasleem, our billing and collection division also recorded stronger growth as it continued to onboard new third-party customers. Moving on to the next slide, talking about the profitability, gross profit remained stable year over year, and that it can be demonstrated during the H1 of 2026 at AED 528 million.

Speaker #2: The seasonality chart on the bottom right shows that Q2 is usually the second-highest quarter for consumption. As a result of this seasonality and the Q2 weather impact, Chilled Water revenue for the quarter declined 3% year over year.

Speaker #2: In the value chain business, growth during the period was mainly driven by our manufacturing arm of the pre-insulated piping company, which delivered a large contract during the quarter.

Speaker #2: Tasleem, our billing and collection division, also recorded stronger growth as it continued to onboard new third-party customers. Moving on to the next slide, talking about the profitability, gross profit remained stable year over year, and that you can be demonstrated during the first half of 2026 at 528 million.

Salim Malek: Higher operating costs were mainly driven by increased material costs linked to growth in the value chain businesses, and the maintenance spend that we do based on our proactive asset management strategy, and increased personal expenses. EBITDA reached AED 615 million during this period, with a margin of 55% remained comfortably within our last 12 months guidance range of 50% to 53%. The year-over-year margin decline compared to 57% to 55% mainly reflects a change in revenue mix with a higher contribution from our lower margin value chain businesses, as well as the higher G&A expenses.

Salik Malik: Higher operating costs were mainly driven by increased material costs linked to growth in the value chain businesses, and the maintenance spend that we do based on our proactive asset management strategy, and increased personal expenses. EBITDA reached AED 615 million during this period, with a margin of 55% remained comfortably within our last 12 months guidance range of 50% to 53%. The year-over-year margin decline compared to 57% to 55% mainly reflects a change in revenue mix with a higher contribution from our lower margin value chain businesses, as well as the higher G&A expenses.

Speaker #2: Higher operating costs were mainly driven by increased material costs linked to growth in the value chain businesses, and the maintenance spend that we incur based on our proactive asset management strategy.

Speaker #2: And increased personal expenses. EBITDA reached $615 million during this period, with a margin of 55% that remained comfortably within our last 12 months guidance range of 50 to 53%.

Speaker #2: The year over year margin declined compared to 57 to 55, mainly reflects a change in revenue mix with a higher contribution from our lower margin value chain businesses, as well as the higher G&A expenses.

Speaker #2: The increase in G&A reflects several factors, major being the timing of the expenses recognized compared to the priority period, higher staff cost, benefits, aligned with the market benchmarks, and additionally quarter-specific costs including the development expenses such as legal and commercial due diligence, as well as the higher insurance fees for expanded risk coverage.

Salim Malek: The increase in G&A reflects several factors, major being the timing of the expenses recognized compared to the priority period, higher staff cost benefits aligned with the market benchmarks, and additionally, quarter specific costs, including the development expenses such as legal and commercial due diligence, as well as the higher insurance fees for expanded risk coverage. These items created a tougher year-on-year comparison, but they do not change our disciplined approach to cost management or our focus on operational efficiency. Moving on to the next slide. Reported net profit declined 30% year over year to AED 192 million, and the normalized net profit excluding the one-off items was around AED 194 million, broadly aligned with the reported results. The year-on-year movement was mainly driven by two factors, which I will address in turn. First, the net finance cost rose by 49% year over year from AED 95 million to AED 142 million.

Salik Malik: The increase in G&A reflects several factors, major being the timing of the expenses recognized compared to the priority period, higher staff cost benefits aligned with the market benchmarks, and additionally, quarter specific costs, including the development expenses such as legal and commercial due diligence, as well as the higher insurance fees for expanded risk coverage. These items created a tougher year-on-year comparison, but they do not change our disciplined approach to cost management or our focus on operational efficiency. Moving on to the next slide. Reported net profit declined 30% year over year to AED 192 million, and the normalized net profit excluding the one-off items was around AED 194 million, broadly aligned with the reported results. The year-on-year movement was mainly driven by two factors, which I will address in turn. First, the net finance cost rose by 49% year over year from AED 95 million to AED 142 million.

Speaker #2: These items created a tougher year-on-year comparison, but they do not change our disciplined approach to cost management or our focus on operational efficiency. Moving on to the next slide, reported net profit declined 30% year over year to 192 million, and the normalized net profit excluding the one-off items was around 194 million.

Speaker #2: Broadly aligned with the reported results. The year-on-year movement was mainly driven by two factors, which I will address in turn. First, net finance costs rose by 49% year over year, from 95 million to 142 million.

Salim Malek: This was driven by higher average debt following the PAL Cooling acquisition in the last quarter of last year, and by the repricing of the debt after the green Sukuk refinancing at the end of last year's Q1. The original AED 2.6 billion facility was raised in 2020 during an exceptionally low interest rate environment. Following the refinancing, the funding cost was reset to prevailing market rates. Importantly, this represents a one-time rebasing of finance costs rather than a structural change in our capital allocation strategy or our financial approach. Second, our share of results from our joint ventures and associates declined from AED 16 million to AED 7 million. This was mainly driven by our acquisition of PAL Cooling, which is based on the current stage of asset operational ramp-up.

Salik Malik: This was driven by higher average debt following the PAL Cooling acquisition in the last quarter of last year, and by the repricing of the debt after the green Sukuk refinancing at the end of last year's Q1. The original AED 2.6 billion facility was raised in 2020 during an exceptionally low interest rate environment. Following the refinancing, the funding cost was reset to prevailing market rates. Importantly, this represents a one-time rebasing of finance costs rather than a structural change in our capital allocation strategy or our financial approach. Second, our share of results from our joint ventures and associates declined from AED 16 million to AED 7 million. This was mainly driven by our acquisition of PAL Cooling, which is based on the current stage of asset operational ramp-up.

Speaker #2: This was driven by higher average debt following the PAL Cooling acquisition in the last quarter of last year, and by the repricing of the debt after the Green Sukuk refinancing at the end of last year's first quarter. The original AED 2.6 billion facility was raised in 2020 during an exceptionally low interest rate environment.

Speaker #2: Following the refinancing, the funding cost was reset to prevailing market rates. Importantly, this represents a one-time rebasing of finance costs, rather than a structural change in our capital allocation strategy or our financial approach.

Speaker #2: Second, our share of results from our joint ventures and associates declined from AED 16 million to AED 7 million. This was mainly driven by our acquisition of PAL Cooling, which is based on the current state of assets' operational ramp-up.

Speaker #2: This outcome is consistent with our investment case and expectations. We expect stronger contributions over time as utilization and operational capacity increase. Overall, while these factors affected the reported net profit during the period, they do not change the strength of the underlying business.

Salim Malek: This outcome is consistent with our investment case and expectations, and we expect stronger contribution over time as utilization and operational capacity increases. Overall, while these factors affected the reported net profit during the period, they do not change the strength of the underlying business, which continues to deliver resilient operating performance and strong cash generation. With that, I'll move on to the balance sheet highlights. Our balance sheet continues to remain strong and to support with the investment-grade credit profile. The total assets stood at AED 14.6 billion, broadly stable compared with the year-end 2025. The main movement was higher receivables reflecting increased customer billing following the seasonally higher consumption compared with the December ending quarter. Excluding the seasonal effect, receivables days improved compared with the prior year period.

Salik Malik: This outcome is consistent with our investment case and expectations, and we expect stronger contribution over time as utilization and operational capacity increases. Overall, while these factors affected the reported net profit during the period, they do not change the strength of the underlying business, which continues to deliver resilient operating performance and strong cash generation. With that, I'll move on to the balance sheet highlights. Our balance sheet continues to remain strong and to support with the investment-grade credit profile. The total assets stood at AED 14.6 billion, broadly stable compared with the year-end 2025. The main movement was higher receivables reflecting increased customer billing following the seasonally higher consumption compared with the December ending quarter. Excluding the seasonal effect, receivables days improved compared with the prior year period.

Speaker #2: Which continues to deliver resilient operating performance and strong cash generation. With that, I'll move on to the balance sheet highlights. Our balance sheet continues to remain strong and supports the investment-grade credit profile.

Speaker #2: The total assets stood at AED 14.6 billion, broadly stable compared with the year-end 2025. The main movement was higher receivables, reflecting increased customer billing following the seasonally higher consumption compared with the December ending quarter.

Speaker #2: Excluding the seasonal effect, receivables days improved compared with the prior year period. Investments in associates and JVs were due to the purchase of a non-controlling stake in Tabriz Asia and the equity contribution to PAL Cooling.

Salim Malek: Investments in associates and JVs due to the purchase of non-controlling stake in Tabreed this year and the equity contribution to PAL Cooling. Fixed assets movement mainly reflected periodic depreciation and amortization, partially offset by additions to the capital work in progress. On the liability side, total debt declined marginally to AED 6.4 billion following the scheduled repayments. Payables increased mainly due to accrued utility payments in line with the sequential increase in consumption and utility costs. The modest increase in equity and reserves reflected profit generation and fair value movements on derivatives, partly offset by the payment of H2 2025 dividend that we had paid in the Q2 of this year. Net Debt to EBITDA improved to 4.57x at the end of H1, compared with 4.6x at the end of the year 2025.

Salik Malik: Investments in associates and JVs due to the purchase of non-controlling stake in Tabreed this year and the equity contribution to PAL Cooling. Fixed assets movement mainly reflected periodic depreciation and amortization, partially offset by additions to the capital work in progress. On the liability side, total debt declined marginally to AED 6.4 billion following the scheduled repayments. Payables increased mainly due to accrued utility payments in line with the sequential increase in consumption and utility costs. The modest increase in equity and reserves reflected profit generation and fair value movements on derivatives, partly offset by the payment of H2 2025 dividend that we had paid in the Q2 of this year. Net Debt to EBITDA improved to 4.57x at the end of H1, compared with 4.6x at the end of the year 2025.

Speaker #2: Fixed assets movement mainly reflected periodic depreciation and amortization, partially offset by additions to capital work in progress. On the liability side, total debt declined marginally to AED 6.4 billion, following the scheduled repayments.

Speaker #2: Payables increased mainly due to accrued utility payments, in line with the sequential increase in consumption and utility costs. The modest increase in equity and reserves reflected profit generation and the fair value movements on derivatives.

Speaker #2: Partly offset by the payment of the H2 2025 dividend that we had paid in the second quarter of this year. Net debt to EBITDA improved to 4.57 times at the end of the first half compared with 4.6 times at the end of the year 2025.

Speaker #2: This remains comfortably within the investment-grade parameters, and we are pleased that both Moody's and Fitch reaffirmed our investment-grade credit ratings. Importantly, we have no significant debt maturities scheduled over the next 12 months, apart from the scheduled amortization related to the Islamic financing facility raised late last year.

Salim Malek: This remains comfortably within the investment-grade parameters, and we are pleased that both Moody's and Fitch reaffirmed our investment-grade credit ratings. Importantly, we have no significant debt maturities scheduled over the next 12 months, apart from the scheduled amortization related to the Islamic financing facility raised late last year. This provides meaningful financial flexibility and limits our near-term refinancing risk. As shown in the debt maturity profile at the bottom right, most of our maturities, which is approximately close to $4 billion, fall between 2029 and 2035, providing long-term funding visibility and the runway. Let me move on to the next slide. This is regarding the cash flow generation. In H1, we generated AED 616 million of operating cash flow before working capital movements, reflecting the continued strength and resilience of our core operations.

Salik Malik: This remains comfortably within the investment-grade parameters, and we are pleased that both Moody's and Fitch reaffirmed our investment-grade credit ratings. Importantly, we have no significant debt maturities scheduled over the next 12 months, apart from the scheduled amortization related to the Islamic financing facility raised late last year. This provides meaningful financial flexibility and limits our near-term refinancing risk. As shown in the debt maturity profile at the bottom right, most of our maturities, which is approximately close to $4 billion, fall between 2029 and 2035, providing long-term funding visibility and the runway. Let me move on to the next slide. This is regarding the cash flow generation. In H1, we generated AED 616 million of operating cash flow before working capital movements, reflecting the continued strength and resilience of our core operations.

Speaker #2: This provides meaningful financial flexibility and limits our near-term refinancing risk. As shown in the debt maturity profile at the bottom right, most of our maturities—which is approximately close to $4 billion—fall between 2029 and 2035, providing long-term funding visibility and runway.

Speaker #2: Let me move on to the next slide. This is regarding the cash flow generation. In the first half, we generated 616 million of operating cash flow before working capital movements.

Speaker #2: Reflecting the continued strength and resilience of our core operations, working capital contributed a further 15 million dirhams, mainly driven by higher payables and improved collections from receivables.

Salim Malek: Working capital contributed further AED 15 million, mainly driven by higher payables and improved collections from the receivables. This reflects efficient working capital management supported by high credit quality of our customer base and our disciplined approach to cash collections and treasury management. As a result, net operating cash flow reached AED 632 million, up by 40% year-over-year, representing a very strong cash flow performance for H1 of this year. Capital expenditure totaled AED 127 million during H1. Primarily, this was directed towards the greenfield developments and network expansion within our existing concessions. Consequently, free cash flows reached AED 467 million. Surplus cash was used to service debt, pay dividends to the shareholders. Even after funding the capital expenditure, meeting debt service obligations, and returning capital to our shareholders through dividends, our cash balance remained broadly stable year to date.

Salik Malik: Working capital contributed further AED 15 million, mainly driven by higher payables and improved collections from the receivables. This reflects efficient working capital management supported by high credit quality of our customer base and our disciplined approach to cash collections and treasury management. As a result, net operating cash flow reached AED 632 million, up by 40% year-over-year, representing a very strong cash flow performance for H1 of this year. Capital expenditure totaled AED 127 million during H1. Primarily, this was directed towards the greenfield developments and network expansion within our existing concessions. Consequently, free cash flows reached AED 467 million. Surplus cash was used to service debt, pay dividends to the shareholders. Even after funding the capital expenditure, meeting debt service obligations, and returning capital to our shareholders through dividends, our cash balance remained broadly stable year to date.

Speaker #2: This reflects efficient working capital management, supported by the high credit quality of our customer base and our disciplined approach to cash collections and treasury management.

Speaker #2: As a result, net operating cash flow reached 632 million, up by 40% year over year, representing a very strong cash flow performance for the first half of this year.

Speaker #2: Capital expenditure totaled $127 million during the first half. Primarily, this was directed towards the Greenfield developments and network expansion within our existing concessions. Consequently, free cash flows reached $467 million. Cash was also used to service debt and pay dividends to the shareholders.

Speaker #2: Even after funding the capital expenditure, meeting debt service obligations, and returning capital to our shareholders through dividends, our cash balance remained broadly stable year to date.

Speaker #2: This underscores a key strength of our business model, which is its ability to generate strong, predictable cash flow consistently. With that, I will hand back the call to Adel for an update on our outlook.

Salim Malek: This underscores a key strength of our business model, which is its ability to generate strong, predictable cash flow consistently. With that, I will hand back the call to Adel for an update on our outlook.

Salik Malik: This underscores a key strength of our business model, which is its ability to generate strong, predictable cash flow consistently. With that, I will hand back the call to Adel for an update on our outlook.

Speaker #1: Thank you, Salik. As of the first half of 2026, organic connected capacity growth stood at 1.5%, supported by new connections across our existing locations. Capacity additions in the first half were relatively modest, mainly due to the phasing of customer construction schedules, with some project handovers moving beyond our original expectations.

Adel Salem Al Wahedi: Thank you, Salim. As of H1 2026, organic connected capacity growth stood at 1.5%, supported by new connections across our existing connections. Capacity additions in H1 were relatively modest, mainly due to the phasing of customer construction schedules, with some project handovers moving beyond our original expectations. This reflects normal contracting and execution lead time in the construction sector, as well as extended delivery timelines for certain projects amid the evolving regional situation. We continue to see these projects progressing and view the movement as a timing shift rather than a change in underlying demand. Against this situation, management has taken a prudent approach to revising the company's capacity growth guidance. The expected impact is largely limited to the near term in 2026, while the company's long-term growth outlook remains intact.

Adel Al Wahedi: Thank you, Salik. As of H1 2026, organic connected capacity growth stood at 1.5%, supported by new connections across our existing connections. Capacity additions in H1 were relatively modest, mainly due to the phasing of customer construction schedules, with some project handovers moving beyond our original expectations. This reflects normal contracting and execution lead time in the construction sector, as well as extended delivery timelines for certain projects amid the evolving regional situation. We continue to see these projects progressing and view the movement as a timing shift rather than a change in underlying demand. Against this situation, management has taken a prudent approach to revising the company's capacity growth guidance. The expected impact is largely limited to the near term in 2026, while the company's long-term growth outlook remains intact.

Speaker #1: This reflects normal contracting and execution lead time in the construction sector, as well as extended delivery timelines for certain projects amid the evolving regional situation.

Speaker #1: We continue to see these projects progressing and view the movement as a timing shift rather than a change in underlying demand. In light of this situation, management has taken a prudent approach to revising the company's capacity growth guidance.

Speaker #1: The expected impact is largely limited to the near term in 2026, while the company's long-term growth outlook remains intact. Supported by continued expansion opportunities and resilient market fundamentals, a portion of our capacity additions and related revenue contribution originally expected in 2026 is now anticipated to be recognized later than planned.

Adel Salem Al Wahedi: Supported by continued expansion opportunities and resilient market fundamentals, a portion of the capacity additions and related revenue contribution originally expected in 2026 is now anticipated to be recognized later than planned. Accordingly, we now expect connected capacity growth of approximately 1% in 2026 before returning to our medium-term growth path of 3% to 5% annually in 2027 and 2028. On capital expenditures, we invested AED 127 million in the H1 of this year, fully aligned with our targeted organic CapEx range of AED 200 to 300 million per year. Our CapEx guidance remains unchanged, and we will update the market if any new projects or investment opportunities require a change to our CapEx plans. Our last 12 months EBITDA margin remains stable at 51%, comfortably within our previously communicated guidance range of 50% to 53%, highlighting the resilience and efficiency of our operating model.

Adel Al Wahedi: Supported by continued expansion opportunities and resilient market fundamentals, a portion of the capacity additions and related revenue contribution originally expected in 2026 is now anticipated to be recognized later than planned. Accordingly, we now expect connected capacity growth of approximately 1% in 2026 before returning to our medium-term growth path of 3% to 5% annually in 2027 and 2028. On capital expenditures, we invested AED 127 million in the H1 of this year, fully aligned with our targeted organic CapEx range of AED 200 to 300 million per year. Our CapEx guidance remains unchanged, and we will update the market if any new projects or investment opportunities require a change to our CapEx plans. Our last 12 months EBITDA margin remains stable at 51%, comfortably within our previously communicated guidance range of 50% to 53%, highlighting the resilience and efficiency of our operating model.

Speaker #1: Accordingly, we now expect connected capacity growth of approximately 1% in 2026, before returning to our medium-term growth path of 3% to 5% annually in 2027 and 2028.

Speaker #1: On capital expenditures, we invested AED 127 million in the first half of this year, fully aligned with our targeted organic capex range of AED 200 to 300 million per year.

Speaker #1: Our CapEx guidance remains unchanged, and we will update the market if any new projects or investment opportunities require a change to our CapEx plans.

Speaker #1: Our last 12 months' EBITDA margin remains stable at 51%, comfortably within our previously communicated guidance range of 50% to 53%, highlighting the resilience and efficiency of our operating model.

Speaker #1: However, given ongoing inflationary pressures—particularly on personnel costs and other expenses such as insurance fees and regulatory scope—we are modestly updating our margin outlook and now expect EBITDA margin to be around 50% going forward.

Adel Salem Al Wahedi: However, given ongoing inflationary pressures, particularly on personnel costs and other expenses such as insurance fees and regulatory scope, we are modestly updating our margin outlook and now expect EBITDA margin to be around 50% going forward. While this is a refinement to our guidance, it remains robust and consistent with the lower end of our previously communicated range. As of H1 of this year, Net Debt to EBITDA stood at 4.57 multiples, keeping us comfortably within the parameters associated with our investment-grade ratings. In addition to leverage metrics, rating agencies also assess cashflow-based measures, including Moody's retained cash flow to net debt ratio, which is an important component of our overall credit profile. As a result, our capital allocation framework is considered through the lens of both leverage and cash flow credit metrics.

Adel Al Wahedi: However, given ongoing inflationary pressures, particularly on personnel costs and other expenses such as insurance fees and regulatory scope, we are modestly updating our margin outlook and now expect EBITDA margin to be around 50% going forward. While this is a refinement to our guidance, it remains robust and consistent with the lower end of our previously communicated range. As of H1 of this year, Net Debt to EBITDA stood at 4.57 multiples, keeping us comfortably within the parameters associated with our investment-grade ratings. In addition to leverage metrics, rating agencies also assess cashflow-based measures, including Moody's retained cash flow to net debt ratio, which is an important component of our overall credit profile. As a result, our capital allocation framework is considered through the lens of both leverage and cash flow credit metrics.

Speaker #1: While this is a refinement to our guidance, it remains robust and consistent with the lower end of our previously communicated range. As of the first half of this year, net debt to EBITDA stood at 4.57 times, keeping us comfortably within the parameters associated with our investment grade ratings.

Speaker #1: In addition to leverage metrics, rating agencies also assess cash flow-based measures, including Moody's retained cash flow to net debt ratio, which is an important component of our overall credit profile.

Speaker #1: As a result, our capital allocation framework is considered through the lens of both leverage and cash flow credit metrics. We remain committed to maintaining a strong investment grade balance sheet, while balancing our growth ambitions and shareholder returns.

Adel Salem Al Wahedi: We remain committed to maintaining a strong investment-grade balance sheet while balancing our growth ambitions and shareholders' returns. Next slide. Looking beyond the near term, this slide provides clearer visibility on the growth underpinning our expectations for the years ahead. We have a strong pipeline of contracted capacity scheduled to come online over the coming years, supporting future revenue growth. This includes the transactions as announced in last year, which further enhance the visibility of our growth profile. A significant portion of this growth is already secured through long-term customer agreements, providing a solid foundation for future performance and reinforcing our positive outlook. With that, let me turn to our concluding slide. We continue to see attractive growth opportunities across the UAE as a main market and the wider GCC, supported by population growth, infrastructure investment, net zero ambitions, and ongoing real estate development.

Adel Al Wahedi: We remain committed to maintaining a strong investment-grade balance sheet while balancing our growth ambitions and shareholders' returns. Next slide. Looking beyond the near term, this slide provides clearer visibility on the growth underpinning our expectations for the years ahead. We have a strong pipeline of contracted capacity scheduled to come online over the coming years, supporting future revenue growth. This includes the transactions as announced in last year, which further enhance the visibility of our growth profile. A significant portion of this growth is already secured through long-term customer agreements, providing a solid foundation for future performance and reinforcing our positive outlook. With that, let me turn to our concluding slide. We continue to see attractive growth opportunities across the UAE as a main market and the wider GCC, supported by population growth, infrastructure investment, net zero ambitions, and ongoing real estate development.

Speaker #1: Next slide. Looking beyond the near term, this slide provides clearer visibility on the growth underpinning our expectations for the years ahead. We have a strong pipeline of contracted capacity scheduled to come online over the coming years, supporting future revenue growth.

Speaker #1: This includes the transactions announced last year, which further enhance the visibility of our growth profile. A significant portion of this growth is already secured through long-term customer agreements, providing a solid foundation for future performance and reinforcing our positive outlook.

Speaker #1: With that, let me turn to our concluding slide. We continue to see attractive growth opportunities across the UAE as a main market and the wider GCC, supported by population growth, infrastructure investment, net zero ambitions, and ongoing real estate development.

Adel Salem Al Wahedi: All of which are driving demand for efficient and sustainable cooling. Our core business remains resilient and highly predictable, supported by long-term contracted revenues. In parallel, our strategic investments and developments have strengthened our platform for future growth. Through disciplined capital allocation, funding, and balance sheet management, we remain focused on creating sustainable long-term shareholders value while preserving the financial strength and flexibility that support our investment-grade credit profile. With that, we conclude our presentation. We will now open the floor for the questions.

Adel Al Wahedi: All of which are driving demand for efficient and sustainable cooling. Our core business remains resilient and highly predictable, supported by long-term contracted revenues. In parallel, our strategic investments and developments have strengthened our platform for future growth. Through disciplined capital allocation, funding, and balance sheet management, we remain focused on creating sustainable long-term shareholders value while preserving the financial strength and flexibility that support our investment-grade credit profile. With that, we conclude our presentation. We will now open the floor for the questions.

Speaker #1: All of which are driving demand for efficient and sustainable cooling. Our core business remains resilient and highly predictable, supported by long-term contracted revenues. In parallel, our strategic investments and developments have strengthened our platform for future growth.

Speaker #1: Through disciplined capital allocation, funding, and balance sheet management, we remain focused on creating sustainable, long-term shareholder value while preserving the financial strength and flexibility that support our investment-grade credit profile.

Speaker #1: With that, we conclude our presentation. We'll now open the floor for questions.

Speaker #2: Thank you very much for the presentation. We will now be moving to the Q&A part of the call. If you are dialed in via telephone, please press star two on your keypad.

Operator: Thank you very much for the presentation. We will now be moving to the Q&A part of the call. If you are dialed in via telephone, please press star 2 on your keypad. That is star 2 on your keypad. You may also ask a voice or a text question if you are dialed in via the web. We will take the first question from Mr. Abhishek Sukmal from Decimal Point Analytics. When do you expect PAL Cooling to become positively accretive to net profit? What earnings or synergy contribution should investors expect once this asset is fully integrated?

Speaker #2: That's star two on your keypad. You may also ask a voice or a text question if you are dialed in via the web. We'll take the first question from Mr. Abu Sheikh.

Speaker #2: From Decimal Point Analytics: When do you expect PAL Cooling to become positively accretive to net profit, and what earnings or synergy contribution should investors expect once this asset is fully integrated?

Salim Malek: Hi, good afternoon, Abhishek. Thanks, thanks for this question. See, first of all, we would like to mention that the PAL acquisition, which we concluded last year, is an iconic asset for our portfolio, and it is coming with a long-term value. The total connected capacity today stands at around 190,000, but the whole concession is expected to around 600,000. As you know, there is a big potential to increase this capacity in the days to come. In the short term, you would notice this kind of negative impact to our share of results in the JVs. That is predominantly due to the full funding of this from the debt of this whole acquisition value, in addition to the value that has been considered as part of the PPA accounting, where there is a high depreciation and amortization of our intangibles, which is on the contract value.

Salik Malik: Hi, good afternoon, Abhishek. Thanks, thanks for this question. See, first of all, we would like to mention that the PAL acquisition, which we concluded last year, is an iconic asset for our portfolio, and it is coming with a long-term value. The total connected capacity today stands at around 190,000, but the whole concession is expected to around 600,000. As you know, there is a big potential to increase this capacity in the days to come. In the short term, you would notice this kind of negative impact to our share of results in the JVs. That is predominantly due to the full funding of this from the debt of this whole acquisition value, in addition to the value that has been considered as part of the PPA accounting, where there is a high depreciation and amortization of our intangibles, which is on the contract value.

Speaker #1: Good afternoon, Abu Sheikh. Thank you for this question. First of all, we'd like to mention that the PAL acquisition, which we concluded last year, is an iconic asset for our portfolio, and it is coming with long-term value.

Speaker #1: The total connected capacity today stands at around 190,000, but the whole concession is expected to be around 600,000. So, as you know, there's a big potential to increase this capacity in the days to come.

Speaker #1: So, in the short term, you would notice this kind of negative impact to our share of results in the JVs. That is predominantly due to the full funding of this from the debt of this whole acquisition value.

Speaker #1: In addition to the value that has been considered as part of the PP and accounting, there is a high depreciation and amortization of our intangibles, which is on the contract value.

Speaker #1: So, as the capacity increases in the days to come, this will be turning into the positive. First of all, I want to give the assurance that this is as per our investment case, and we are performing better than the investment case in the short term as well.

Salim Malek: As the capacity increases in the days to come, this will be turning into the positive. Also to give an assurance that this is as per our investment case, and we are performing better than the investment case in this short term as well.

Salik Malik: As the capacity increases in the days to come, this will be turning into the positive. Also to give an assurance that this is as per our investment case, and we are performing better than the investment case in this short term as well.

Operator: Okay, thank you very much. Our next question comes from Mr. Omar Al Rashidi from Bank Muscat Securities. When are earnings expected from the new concession and acquisition?

Speaker #2: Okay. Thank you very much. The next question comes from Mr. Omar Arashi from Bank Muscat Securities. When are earnings expected from the new concession and acquisition?

Salim Malek: Hi, Omar. Again, I would like to take this question. The earnings expected from these new concessions and acquisitions, again, today we are having a total connected capacity of around 1.6 billion, and when this is fully commissioned, all these concessions that are under the pipeline, this will add another 1 million RTs. In the short term, let's say between 5 to 7 years, around half of this will be connected, and beyond the period of 7 years, the other half will be connected. As these developments progress, and these are predominantly again in UAE, we expect this to add value to our growth. This has been guided through our growth guidance as well, which is in the medium term as 3% to 5%.

Salik Malik: Hi, Omar. Again, I would like to take this question. The earnings expected from these new concessions and acquisitions, again, today we are having a total connected capacity of around 1.6 billion, and when this is fully commissioned, all these concessions that are under the pipeline, this will add another 1 million RTs. In the short term, let's say between 5 to 7 years, around half of this will be connected, and beyond the period of 7 years, the other half will be connected. As these developments progress, and these are predominantly again in UAE, we expect this to add value to our growth. This has been guided through our growth guidance as well, which is in the medium term as 3% to 5%.

Speaker #1: Hi Omar. So again I would like to take this question. So the earnings expected from this new concessions and acquisitions again see today we are having a total connected capacity of around 1.6 billion and our on when this fully commissioned all these concessions that are under the pipeline this will add another 1 million tons.

Speaker #1: And in the short term, let's say between 5 to 7 years, this should be around half of this. This will be connected, and beyond the period of 7 years, the other half will be connected.

Speaker #1: So as these developments progress, and these are predominantly again in UAE, we expect this to add value to our growth. This has been guided through our growth guidance as well, which is in the medium term as 3% to 5%.

Speaker #2: Okay, thank you very much. Our next question comes from Mr. Vladimir David, Musinich & Co. There are three questions, and I'll read them perhaps one by one.

Operator: Okay, thank you very much. Our next question comes from Mr. Vladimir David, Muzinich & Co. There are three questions, and I will read them perhaps one by one. First question is, have you already updated Moody's on your revised guidance, and what was their reaction? First question.

Speaker #2: First question is, have you already updated Moody's on your revised guidance, and what was their reaction? First question.

Adel Salem Al Wahedi: Hi, Vladimir. We are doing the review with Fitch and Moody's on an annual basis, and definitely we will do that to reflect that. I would like to stress always that we will maintain the investment grade. We will never shy away, even with that guidance, if there are any changes, but still we will maintain investment grade.

Adel Al Wahedi: Hi, Vladimir. We are doing the review with Fitch and Moody's on an annual basis, and definitely we will do that to reflect that. I would like to stress always that we will maintain the investment grade. We will never shy away, even with that guidance, if there are any changes, but still we will maintain investment grade.

Speaker #1: Hi, hi, Vladimir. See, we are doing the review with the Ficha Moody's on an annual basis, and definitely we will do that to reflect that, but I would like to stress that we will always maintain the investment grade.

Speaker #1: We'll never shy away, you know, even with that guidance. If there are any changes, we will still maintain investment grade.

Speaker #2: Okay, thank you very much. The second question is from Mr. Vladimir. For 2026, if capacity additions are lower, why is the organic capex guidance unchanged?

Operator: Okay, thank you very much. The second question from Mr. Vladimir. For 2026, if capacity additions are lower, why is the organic CapEx guidance unchanged?

Adel Salem Al Wahedi: Hi again, Vladimir. As you can understand, our industry, our business is a long-term business. It is not seasonal. So whatever we deploy as CapEx or investments is for the longer run, not on a short term. This is the direct answer for that.

Adel Al Wahedi: Hi again, Vladimir. As you can understand, our industry, our business is a long-term business. It is not seasonal. So whatever we deploy as CapEx or investments is for the longer run, not on a short term. This is the direct answer for that.

Speaker #1: Hi again, Vladimir. As you understand, you know our industry—our business is long-term business, it is not seasonal. So whatever we deploy as capex or investments is for the longer run, not on a short term.

Speaker #1: This is, you know, the direct, you know, answer for that.

Operator: Okay, thank you very much. The final question from Mr. Vladimir. Can you please refresh us on your dividend policy?

Speaker #2: Okay, thank you very much. And the final question from Mr. Vladimir: can you please refresh us on your dividend policy?

Adel Salem Al Wahedi: Yes, hi again. Yes. See, currently, the guidance we have about the dividends, it is whatever that growth is happening, definitely the shareholder, they will benefit of that return for sure. We introduced interim dividend last year and for this year, as announced, we are maintaining that. Once we have a different structure of our policy, et cetera, definitely it will be announced and distributed in the market.

Adel Al Wahedi: Yes, hi again. Yes. See, currently, the guidance we have about the dividends, it is whatever that growth is happening, definitely the shareholder, they will benefit of that return for sure. We introduced interim dividend last year and for this year, as announced, we are maintaining that. Once we have a different structure of our policy, et cetera, definitely it will be announced and distributed in the market.

Speaker #1: Yes. Hi again. Yes. See currently that the guidance we have about the the dividends it is you know whatever that you know a growth is happening definitely the shareholder they will benefit of that return for sure.

Speaker #1: We introduced the interim dividend last year, and for this year, as announced, we are maintaining that. Once we have, you know, a different structure of a policy, etc., it will definitely be announced and distributed in the market.

Operator: Okay, thank you very much. Our next question comes from Ms. Ambereen Jiwani from Ajeej Capital. Can you please discuss the monthly consumption trends during the quarter. Also, is consumption growth positive in July year-on-year?

Speaker #2: Okay, thank you very much. Our next question comes from Ms. Ambreen Juani from Ajish Capital. Can you please discuss the monthly consumption trends during the quarter?

Speaker #2: Well, also, is consumption growth positive in July year on year?

Salim Malek: Hello, Ambreen. Good afternoon again. Good question. With regards to the monthly consumption pattern, again, even if I am able to say this may not add value much into your answer, but rather what we do is on our slide, as will be presented, it is on quarterly. Generally, Q2 and Q3 of the year are the periods where we see higher consumption, mainly due to, again, the weather pattern that is there in the region. Having said that, this year, and especially in Q2 and the beginning of April and May, the temperatures were cooler than the usually recorded temperatures. We have seen this, and we measure it based on the blended cooling degree hours, which was lower. If I can tell you how the temperatures were there compared to previous year, in April, we have seen almost 20% lower compared to previous year.

Salik Malik: Hello, Ambreen. Good afternoon again. Good question. With regards to the monthly consumption pattern, again, even if I am able to say this may not add value much into your answer, but rather what we do is on our slide, as will be presented, it is on quarterly. Generally, Q2 and Q3 of the year are the periods where we see higher consumption, mainly due to, again, the weather pattern that is there in the region. Having said that, this year, and especially in Q2 and the beginning of April and May, the temperatures were cooler than the usually recorded temperatures. We have seen this, and we measure it based on the blended cooling degree hours, which was lower. If I can tell you how the temperatures were there compared to previous year, in April, we have seen almost 20% lower compared to previous year.

Speaker #1: Hello Ambreen, good afternoon again. Good question. So, with regards to the monthly consumption pattern again, even if I'm able to say this, it may not add much value to your analysis, but rather what we do is, our slide, as will be presented, is on a quarterly basis.

Speaker #1: Generally quarter two and quarter three of the year are the periods where we see higher consumption. Mainly due to again the weather pattern that is there in the region.

Speaker #1: Having said that, this year, and especially in Q2 and the beginning of April and May, the temperatures were cooler than the usually recorded temperatures. We have seen this, and we measure it based on the blended cooling degree, which was lower. If I can tell you how the temperatures were compared to the previous year: in April, we have seen almost 20% lower compared to the previous year.

Salim Malek: Similarly, in May, this was down by 5%. However, in June, this was back to normal compared to the same period last year. The weather is becoming hotter, similar to what we have experienced last year, but April and May had a significant impact on lower temperatures. As a result, we had seen a drop in our volumes, close to 7% overall in the quarter. Hope this answers your query.

Salik Malik: Similarly, in May, this was down by 5%. However, in June, this was back to normal compared to the same period last year. The weather is becoming hotter, similar to what we have experienced last year, but April and May had a significant impact on lower temperatures. As a result, we had seen a drop in our volumes, close to 7% overall in the quarter. Hope this answers your query.

Speaker #1: Similarly, in May, this was down by 5%. However, in June, this was back to normal compared to the same period last year.

Speaker #1: So, the weather is becoming hotter, similar to what we experienced last year. However, April and May had a significant impact, with lower temperatures. As a result, we saw a drop in our volumes—close to 7% overall in the quarter.

Speaker #1: Hope this answers your query.

Speaker #2: Thank you very much for that. We have a follow-up question from Mr. Omar Alrashi from Bank Muscat Securities. Is the decline in dividend from 6.5 to 5 purely due to flexibility needed for potential growth or investment opportunities?

Operator: Thank you very much for that. We have a follow-up question from Mr. Omar Al Rashidi from Bank Muscat Securities. Is the decline in dividend from 6.5 to 5 purely due to flexibility needed for potential growth or investment opportunities?

Adel Salem Al Wahedi: Hi again, Omar. You figured it right. Always, the company, we are adopting a strategy that the current strategy it is pursuing growth and ways how to fund our growth. Also, in the same time, to maximize returns to our shareholders and maintaining investment grade. Always, we will balance all those three main pillars, and the answer is yes.

Adel Al Wahedi: Hi again, Omar. You figured it right. Always, the company, we are adopting a strategy that the current strategy it is pursuing growth and ways how to fund our growth. Also, in the same time, to maximize returns to our shareholders and maintaining investment grade. Always, we will balance all those three main pillars, and the answer is yes.

Speaker #1: Hi again, Omar. You figured it right. Okay. As you know, the company— we are adopting a strategy. The current strategy is pursuing growth and exploring ways to fund our growth.

Speaker #1: Also, you know, at the same time it maximizes returns to our shareholders and maintains investment grade. We will always balance those three main pillars, and the answer is yes.

Operator: Okay, thank you very much. Once again, just a reminder for any additional questions, star 2 for a voice question. You may also ask a voice or a text question if you are dialed in via the web. We will wait a few minutes for any additional questions to come through. Okay, we have a follow-up question from Mr. Omar again from Bank Muscat Securities. Can you please provide figures or estimates of how much the new acquisitions would contribute to the company's earnings?

Speaker #2: Okay, thank you very much. Once again, just a reminder: for any additional questions, press *2 for a voice question. You may also ask a voice or text question if you're dialed in via the web.

Speaker #2: And we'll wait a few minutes for any additional questions to come through. Okay, we have a follow-up question from Mr. Omar again, from Bank Muscat Securities.

Speaker #2: Can you please provide figures or estimates of how much the new acquisitions would contribute to the company's earnings?

Adel Salem Al Wahedi: Yeah. Hi, Omar again. As you can understand, as a listed organization, we cannot provide any such of an accurate projections just like that, but we are still highlighting that we are maintaining the growth for the company. Okay? We are very selective for those growth prospects, and we have very disciplined process to identify that. Thank you.

Adel Al Wahedi: Yeah. Hi, Omar again. As you can understand, as a listed organization, we cannot provide any such of an accurate projections just like that, but we are still highlighting that we are maintaining the growth for the company. Okay? We are very selective for those growth prospects, and we have very disciplined process to identify that. Thank you.

Speaker #1: Yeah. Hi Omar again. You know as you can understand as listed organization we cannot provide you know any such of an any accurate you know projections just like that but we are still highlighting that we are maintaining you know that the the the growth for the the company.

Speaker #1: Okay. And we are very, you know, selective for those growth prospects and we have a very disciplined process to identify that. Thank you.

Speaker #2: Okay, thank you very much. Just a final reminder—once again, we'll give another 30 seconds for any additional questions. For any additional questions, okay.

Operator: Okay, thank you very much. Just a final reminder once again, for any additional questions, we will give another 30 seconds for any additional questions. Okay, it looks like there are no further questions at this point. I will be passing the line back to Tabreed's management and IR team for their concluding remarks.

Speaker #2: It looks like there are no further questions. At this point, I'll be passing the line back to Tabriz Management and the IR team for their concluding remarks.

Salim Malek: Thank you everyone for joining today's call and for your interest in Tabreed. This concludes our presentation and Q&A session. Should you require any additional information or have further questions, please contact the IR team at email address ir@tabreed.ae. Thank you for your participation. You may now disconnect.

Salik Malik: Thank you everyone for joining today's call and for your interest in Tabreed. This concludes our presentation and Q&A session. Should you require any additional information or have further questions, please contact the IR team at email address ir@tabreed.ae. Thank you for your participation. You may now disconnect.

Speaker #1: Thank you, everyone, for joining today's call and for your interest in Tabriz. This concludes our presentation and Q&A session. Should you require any additional information or have further questions, please contact the IR team at the email address ir@tabriz.ae.

Speaker #1: Thank you for your participation. You may now disconnect.

Operator: Thank you very much. This concludes today's conference call. We will now be closing all the lines. Thank you and goodbye.

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Half Year 2026 National Central Cooling Co PJSC Earnings Call

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