Salik upgrades revenue guidance after record third quarter

EBITDA was up 8.9 per cent to AED 1,115 million ($303.6 million) for 9M 2024 and profit before tax was at AED 903.3 million ($245.96 million), up 12.5 per cent. Salik generated net profit after tax of AED 822 million ($223.83 million) during the same period, with third-quarter profit after tax increasing 8.8 per cent YoY to AED 277.3 million ($75.5 million).

Salik’s solid balance sheet

In what was the highest third-quarter performance for revenue-generating trips since inception, Salik earned AED 117.1 million ($31.9 million), up 5.7 per cent YoY. The total number of trips, including discounted trips, made through Salik’s eight toll gates, grew 4.1 per cent YoY in the nine-month period, driven by Dubai’s continued attraction to tourists and commercial activities. As a result, revenue-generating trips reached AED 355.6 million ($96.83 million) in the nine-month period, up 5.1 per cent.

Jebel Ali gate witnessed strong double-digit growth (approximately 16 per cent), and other gates grew in the high-single-digit range, including Airport Tunnel (approximately 9 per cent).

Mattar Al Tayer, Chairman of the Board of Directors of Salik, commented: “Our performance in the first nine months of 2024 is a testament to our robust business model and commitment to enhancing mobility in Dubai.

“We made further strategic progress in the third quarter, having officially launched our parking partnership with Emaar to provide parking solutions at Dubai Mall, a key initiative to diversify our revenue base that is already contributing positively to our financial performance.

“On 24 November we will commence operations of the Business Bay Crossing and Al Safa South gates. The launches are a continuation of the RTA’s strategic plan, aimed at enhancing road networks and facilities, public transport lines and services with the aim of improving the flow of traffic.”

Ibrahim Sultan Al Haddad, Chief Executive Officer of Salik, said the company was revising its guidance upwards.

“We remain encouraged by positive trends in Dubai’s economy, which are supportive of our own growth. On this basis, we are pleased to reiterate our recently upgraded guidance for FY24, expecting revenue growth to increase by 7-8 per cent compared to FY23, particularly in view of Q4 typically being a seasonally stronger quarter for Salik,” said Al Haddad.

“We also expect this good growth momentum to continue into next year, with revenue-generating trips expected to increase in the range of 24-25 per cent in FY25, including the contribution from the two new gates.”

Registered active accounts increased 7.1 per cent YoY to nearly 2.5 million in the nine months of 2024, compared to 2.3 million in the nine-month period of 2023. As many as 268,000 tags were activated in the third quarter, an 18.6 per cent YoY increase. The number of vehicles registered with Salik in the third quarter increased 8.7 per cent YoY.

The balance sheet remains solid, with net debt/EBITDA comfortably within the company’s target ratio. It recorded a favourable net working capital balance of AED -218.8 million as of 30 September 2024, equating to approximately -10.0 per cent of annualised revenues. Net debt stood at AED 3,163.3 million ($861.35 million), up from AED 2,947.1 million ($802.46 million) at the end of June 2024.

Salik generated free cash flow of AED 1,054.7 million ($287.2 million) in the nine-month period, up 1.3 per cent YoY, with a free cash flow margin of 64.3 per cent.

Salik made an important step in expanding its ancillary revenue streams through the third quarter, with the successful launch of its barrier-free parking payment solution at Dubai Mall from 1 July. The first full quarter performance of the parking solution has been strong, with a revenue contribution of AED 2.57 million ($700,000) in the three months.