District cooling firm Tabreed's first-quarter net profit fell 21 per cent on Tuesday and the company said its current liabilities and accumulated losses may hurt its ability to continue as a going concern.
The Dubai-listed firm, also known as the National Cooling Co., posted profit of Dh31.9 million ($8.69 million) for the quarter, compared with net profit of 40.4 million dirhams in the year-ago period.
Revenue for the first quarter came in at Dh246.6 million dirhams, Tabreed said in a bourse statement.
The company said current liabilities exceeded its current assets by Dh2.6 billion dirhams, while accumulated losses of Dh972 million amounted to 400 per cent 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 said in the statement.
In February, Tabreed secured a deal with creditors to refinance Dh2.63 billion in debt through an injection of funds by Abu Dhabi-owned fund Mubadala.
Tabreed said the deal, which includes Dh3.1 billion 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.
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.
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