Dubai-based toll operator Salik has reported an impressive yearly increase of over 5% in its third-quarter profit, driven by record revenue growth. The net profit for the period soared to Dh255 million ($69.5 million), up from approximately Dh240 million in the same quarter last year, as disclosed in a regulatory filing to the Dubai Financial Market, where Salik’s shares are listed.
While depreciation and amortization expenses experienced a slight yearly increase to around Dh21 million, compared to Dh20 million in the previous year’s third quarter, finance costs more than doubled to about Dh63 million from Dh29 million in the corresponding quarter of the prior year. The company also incurred a concession fee expense of nearly Dh111 million for the period.
Revenue exhibited remarkable growth, surging over 14% to about Dh509 million, driven by a 15% increase in revenue-generating trips, reaching Dh111 million. This performance marks the highest third-quarter achievement since Salik commenced operations in 2007, supported by sustained growth in tourism and residency.
Salik, established as a public joint stock company in June 2022, with toll usage revenue representing approximately 87% of its total revenue, expressed optimism about its year-to-date performance and favorable macroeconomic indicators for the remainder of the year.
Ibrahim Al Haddad, Chief Executive of Salik, commented, “Strong and sustained momentum in the third quarter is also evidence that the government of Dubai’s focus on expanding the economy, particularly focusing on population growth and maintaining the Emirate’s attractiveness to tourists.”
For the first nine months of 2023, Salik’s net profits declined about 23% yearly to about Dh803 million. However, revenue for the nine-month period jumped about 11%, with revenue-generating trips increasing by 12% yearly to Dh338.2 million.
Mattar Al Tayer, Chairman of Salik, emphasized the company’s emergence as a leading toll gate operator globally, attributing its success to a highly efficient business model and a buoyant local macroeconomic environment.
Salik reported a 9% yearly increase in the number of registered vehicles and a 13% increase in registered active accounts, totaling approximately 2.4 million as of September 30, 2023.
Salik clarified that comparing profitability between the nine-month periods of 2022 and 2023 may not accurately reflect the company’s performance on a like-for-like basis due to changes in its operating structure and cost profile. Since July 2022, Salik has operated as a separate legal entity from the Roads and Transports Authority through a 49-year concession agreement.
Salik completed one year as a listed entity in September 2023, having raised Dh3.73 billion in September 2022 from its initial public offering. The government retained a 75.1% stake after selling more than 1.867 billion shares, or 24.9% of the company, at Dh2 a share.
Salik attributed its achievements in the last twelve months to Dubai’s resilience in a highly volatile global economy and a surge in the volume of traffic on the city’s toll roads.