$153 million in Salik revenues in 3 months

Salik, the exclusive operator of toll gates in Dubai and listed on the Dubai Financial Market, has announced the company’s financial results for the three months ending March 31, 2024 (Q1 2024).

The company said in a statement that it achieved a distinguished revenue performance during the first quarter of 2024, recording an increase in the number of revenue-generating trips to 122.8 million trips, and recorded record total revenues for the first quarter of AED 562 million ($153 million), an increase of 8.1 percent year-on-year, which is the highest number of revenue-generating trips in the first quarter since the company was established.

Revenues from toll fees, which account for 87.4 per cent of total revenues, increased by 8.1 per cent year-on-year to AED 491 million. These results are driven by continued strong growth in the tourism sector and an increase in the number of residents, as Dubai remains an attractive destination for visitors and new residents.

Salik achieved a growth in net profit before tax by 10.7 percent to reach AED 304.7 million during the first quarter of 2024. Despite the application of the 9 percent corporate tax, Salik maintained a growth in its net profit after tax by 0.7 percent to reach AED 277.3 million.

Mattar Al Tayer, Chairman of Salik, said: “Salik has performed exceptionally well in the first quarter of 2024, building on the strong momentum of its record performance in 2023. The results achieved in this quarter are evidence of the success of our strategic vision and our commitment to delivering long-term value to our shareholders, as well as the positive economic environment in the UAE. The growth in GDP, coupled with the strong inflow of tourism, are the fruits of the Dubai government’s initiatives to expand the economy, develop the population, and maintain the emirate’s position as an attractive destination for investors and tourists.”

“We are pleased to start the year with this strong performance, reflected in the increase in the number of revenue-generating trips by more than 8 percent year-on-year, supporting our ambition to become a global leader in providing mobility solutions,” said Ibrahim Al Haddad, CEO of Salik. “While we continue to thrive in our core business of collecting tolls, we are also diversifying our activities by diversifying our revenue streams.”

He added: “The first quarter witnessed strategic progress after the announcement of expanding the toll gate network by adding two new toll gates in Dubai that will be operational by the end of next November, in addition to our announcement at the end of 2023 of our partnership with Emaar to provide technological solutions for barrier-free parking. Both announcements represent a milestone in the development of our business, which contributes to consolidating Salik’s position in the future.”

Key aspects of mobility

Salik recorded a growth in revenue-generating trips of 8.1 percent year-on-year to reach 122.8 million trips.

The total number of trips, including discounted trips, conducted through the eight Salik gates witnessed a growth of 6.2 per cent in the first quarter on an annual basis, driven by the continuous movement of commercial and tourist activities in Dubai.

As a result, the number of revenue-generating trips increased to 122.8 million trips, an increase of 8.1 percent year-on-year, which is the highest number of revenue-generating trips recorded for the first quarter since the company’s inception, and this is in line with the company’s record performance in the fourth quarter of 2023.

During Q1 2024, Al Maktoum Bridge toll gate recorded a 49.0 per cent increase in revenue generating trips year-on-year (excluding paid taxi trips) due to the temporary closure of the floating bridge and the diversion of some traffic to Al Maktoum Bridge. Similarly, Al Garhoud Bridge saw a 9.1 per cent increase in revenue generating trips year-on-year (excluding paid taxi trips). Excluding Al Maktoum and Al Garhoud bridges, revenue generating trips in Q1 increased by 5.3 per cent year-on-year. Growth remained strong at several toll gates during Q1, with Jebel Ali toll gate seeing double-digit growth (over 12 per cent) while other toll gates saw growth in the high single digits including Airport Tunnel and Mamzar North (over 8 per cent).

Record growth in active customer accounts of over 16%, and a 9.2% increase in the number of registered vehicles year-on-year to reach 4.1 million vehicles
The number of active accounts increased by 16.5 percent year-on-year to reach about 2.5 million accounts compared to about 2.1 million accounts in the first quarter of 2023. Salik card activations reached about 242,000 cards in the first quarter, an increase of 13 percent year-on-year.

Furthermore, the number of vehicles registered with Salik in the first quarter increased by 9.2 percent year-on-year, reflecting the continued success of the Dubai government in developing its economy and maintaining the emirate’s position as a major tourist and commercial destination.

Salik continued to offer toll exemptions for vehicles used by charities, schools, people of determination, ambulances and other public services. The number of free trips for exempted vehicles across Salik’s eight gates increased by 5.1 percent year-on-year to reach 2.1 million trips in Q1 2024. This growth was driven by a 10 percent year-on-year increase in the number of exempted vehicles registered to reach 53,819 by the end of Q1.

Key financial performance highlights

Continued strong performance saw Salik’s revenues increase to AED 562 million in the first quarter, an increase of 8.1 percent year-on-year.

• Toll fees: Revenues continued to rise during the first quarter of 2024, supported by the continued growth in tourism and traffic activity in Dubai. As a result, toll fees revenues increased by 8.1 percent year-on-year to reach AED 491 million during the first quarter of 2024.
• Violations: Revenue from violations increased by 6.4 percent year-on-year to AED 59 million, and increased by 8.6 percent compared to Q4 2023. The net number of violations (accepted violations after deleting cancelled violations) increased by 8.2 percent year-on-year to reach 683,000 violations. Violations as a percentage of net trips during Q1 were 0.5 percent, slightly down from Q4, and revenue from violations contributed 10.5 percent of total revenue.
• Salik card activation revenues: Revenues from Salik card activation fees recorded strong growth during the first quarter, increasing by 13.6 percent year-on-year to reach AED 10 million. Salik card activation fees contributed 1.7 percent of total revenues during the first quarter.

Salik maintains profitability rates in the first quarter, with net profit before financing costs, taxes, depreciation and amortization increasing by 8.4 percent year-on-year

Salik’s earnings before interest, taxes, depreciation and amortization reached AED 377 million during the first quarter of 2024, an increase of 8.4 percent year-on-year compared to AED 348 million in the previous year.

EBITDA margin reached 67.1% in the first quarter, compared to 66.8% in the first quarter of 2023 and 65.0% in the fourth quarter of 2023.

The Company recorded a net working capital balance of AED 200 million as at 31 March 2024, equivalent to 35.6 per cent of revenue. Net debt as at 31 March 2024 was AED 3.3 billion compared to AED 3.7 billion at the end of December 2023. This resulted in a net debt to EBITDA ratio for the twelve months of 2.3 times, well below the maximum gearing requirement of 5 times.

Salik generated free cash flow of AED 354 million in the first quarter, with free cash flow margin rising to 62.9 per cent, an increase of 40 basis points compared to 62.5 per cent in the previous year.