Dubai’s Salik posts 11.8 per cent surge in full-year revenue

Dubai’s Salik said its full-year revenue jumped by 11.8 per cent to $517m (Dhs1.9bn), supported by an increase in revenue from toll usage fees “which was driven by positive seasonality effects as well as organic growth in the number of trips.”

The road-toll operator said the number of revenue-generating trips jumped 13 per cent to 413 million trips compared to 367 million in 2021, driven by continued recovery from the pandemic as restrictions were fully lifted in Dubai.

Road to recovery

The increase in revenue-generating trips was also attributed to the positive growth activity and traffic growth. Salik said toll usage fees reached Dhs1.7bn last year from Dhs1.5bn a year earlier.

The company reported a 7 per cent year-on-year increase in the number of vehicles registered with Salik to 3.7 million by the end of December 2022 against 3.5 million for the same period a year earlier, reflecting Dubai’s ongoing efforts to attract tourists and talent.

Similarly, tag activations climbed 13 per cent year-on-year to 779,000 new tags in 2022. However, Salik’s quarterly net profit plunged by 44.6 per cent to Dhs287m down from Dhs415m for the same period the previous year.

The toll operator, in its preliminary financial results statement, said comparing its profitability from one year to another may not accurately reflect the company’s performance on a like-for-like basis due to a change in its operating structure profile. Since July 2022, it has been operating as a separate legal entity from the Roads and Transport Authority through a 49-year concession agreement

Based on the strong results, the Board of Directors, Chaired by His Excellency Mattar Al Tayer, proposed to distribute 100% of Salik’s net profit for the second half of 2022, after deducting AED 37.5 million of statutory reserves, as per Salik’s dividend distribution policy.

— Salik (@Salik_ae) March 7, 2023

Salik’s board proposed to distribute 100 per cent of its H2 2022 net profit, equivalent to Dhs491.4m, after deducting a Dhs37.5m statutory reserve. The proposed dividend totals 6.5521 fils per share.

“This year was one of the new beginnings for Salik and we are proud to have played a role in Dubai’s ambitious privatisation programme through our landmark listing in September 2022,” said Mattar Al Tayer, chairman of the board of directors.

The company projected that the number of revenue-generating trips through its eight toll gates will fully recover in 2023, driven by the strong trajectory in the number of trips made through its gates and traffic levels broadly recovering to pre-pandemic levels.

Salik has played a pivotal role in managing traffic in Dubai for 15 years and remains an integral part of the city’s expansion plans in the road and transport sector in support of its economy.

Salik public listing

Meanwhile, Salik soared in its trading debut on the Dubai Financial Market after its initial public offering (IPO) drew Dhs184bn in orders.

Read: Dubai’s Salik soars in trading debut after huge IPO order book

The Dubai government sold 1.87 billion shares at Dhs2 apiece, equivalent to 24.9 per cent of Salik’s paid-up capital, raising Dhs3.73bn and giving the company a market capitalisation of Dhs15bn. The government retained a 75.1 per cent stake after the IPO.

Salik, which means open in Arabic, is an automated system that was introduced in 2007. Each time a vehicle passes through one of the city’s eight toll gates Dhs4 is charged to a prepaid account, a highly efficient system that removes the need for cash or toll booths.

The company is one of the state-linked entities to execute a Dubai listing successfully last year in a programme that is aimed at boosting trading volumes to Dhs3tn and attracting foreign investor interest in the domestic stock exchange.

The Deputy Ruler of Dubai Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum said in November 2021 that his government approved the establishment of a market-maker fund worth up to Dhs2bn and a Dhs1bn fund to encourage domestic listings.