Dubai toll operator Salik reported a decline in its second quarter after a rise in expenses – even as revenue jumped to a record high.
Net profit for the period slid to nearly Dh273 million ($74.33 million), from about Dh394 million for the same period last year, the company said on Friday in a regulatory filing to the Dubai Financial Market, where its shares are traded.
Depreciation and amortisation expenses for the period rose to about Dh21 million, compared to around Dh2 million recorded in the second quarter of last year, and employee and benefits expenses more than doubled to around Dh6 million.
It also incurred a concession fee expense of nearly Dh114 million for the period.
Impairment loss on trade receivables also rose during the period.
Revenue, meanwhile, grew 13 per cent annually to about Dh517 million as toll usage revenue climbed about 14 per cent to reach a high of Dh455 million ($124 million) since Salik commenced operations in 2007.
Toll usage revenue represents 88 per cent of Salik’s total revenue.
“Revenue generating trips not only surpassed pre-Covid levels, but they also increased from the previous quarter, in spite of the typical seasonality effects,” Mattar Al Tayer, chairman of the board of directors of Salik, said.
“By capitalising on the city's ecosystem and global connectivity, Salik continues to emerge as a leading toll gate operator globally.”
Salik’s first-half profits declined 31 per cent year-on-year to nearly Dh548 million as expenses rose during the period. The company reported a 10 per cent annual jump in its revenue to more than Dh1 billion.
Comparing Salik's profitability between Q2 2022 and Q2 2023, and between H1 2022 and H1 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 the start of its concession agreement, as well as the timing of its listing, the company said in the statement.
Salik raised Dh3.73 billion in September from its IPO that was more than 49 times oversubscribed across all tranches, with total gross demand at Dh184.2 billion.
The Dubai government sold more than 1.867 billion shares in the company, or 24.9 per cent, at Dh2 a share. The government retained 75.1 per cent stake after the sale of the stake.
“The solid achievements reflect Dubai's unwavering economic resilience and an unprecedented surge in the usage of our toll roads,” Ibrahim Al Haddad, chief executive of Salik said.
Dubai’s economy grew an annual 2.8 per cent in the first quarter of the year to Dh111.3 billion, extending the “robust momentum of growth” achieved in 2022, when it expanded by 4.4 per cent.
The emirate's economy is forecast to increase by 3.5 per cent this year, according to Emirates NBD.
The number of international visitors to Dubai also exceeded pre-pandemic levels in the first half of this year, as the emirate's hospitality and tourism sector posted a record performance.