Salik's nine-month net profit jumps 8% amid continued economic momentum in Dubai

Toll operator's revenue for January-September period rose almost 16 %

A Salik toll gate on Sheikh Zayed Road in Dubai. Salik listed its shares on the DFM in September. AP

Dubai's toll operator Salik reported almost 8 per cent jump in nine-month net profit as continued economic momentum in the emirate boosted the company’s revenue.

Net income for the nine-month period to the end of September rose to Dh1.04 billion ($283.37m) from Dh966m reported at the end of the same period last year, the company said in a statement to the Dubai Financial Market, where its shares are traded.

Revenue for the January-September period jumped almost 16 per cent to Dh1.39bn.

Toll use fees rose 16 per cent year-on-year to Dh1.21bn, reflecting growth in traffic. The company’s revenue from fines and penalties for Salik breaches also rose almost 15 per cent on an annual basis to Dh153m.

“The results were reflective of Salik’s strength as Dubai’s exclusive road toll operator,” said Mattar Al Tayer, chairman of Salik.

“The outlook is positive as we stand in a pole position to benefit from Dubai’s ambitious expansion plans and Salik’s growth initiatives.

"We have full confidence in Salik’s ability to deliver great value over the long term to all our shareholders.”

Salik’s net income for the three-month period to the end of September, however, dropped almost 27 per cent to Dh242m.

The company recorded depreciation and amortisation expense of Dh20m, “predominantly reflecting an amortisation expense related to Salik’s Dh4bn upfront concession payment, which was recorded as an intangible on the balance sheet”, it said in the bourse filing.

Salik also incurred Dh29m in finance costs related to its Dh4.2bn credit agreement with Emirates NBD Bank, the company said.

Revenue for the three-month period rose more than 9 per cent on an annual basis to Dh445m.

Salik raised Dh3.73bn from its initial public offering in September that was more than 49 times oversubscribed across all tranches, with total gross demand at Dh184.2bn.

Dubai's government sold more than 1.867 billion shares in the company, or 24.9 per cent, at Dh2 a share. The government retains 75.1 per cent of Salik’s share capital following the share sale.

The UAE Strategic Investment Fund, Dubai Holding, Shamal Holding and the Abu Dhabi Pension Fund were cornerstone investors in the IPO, with a total commitment of Dh606m.

The company said total trips made through its eight toll gates increased about 11 per cent year-on-year to 128 million in the third quarter of this year.

The bell-ringing ceremony led by Mattar Al Tayer, director general and chairman of the RTA's board of executive directors, to mark Salik's debut on the Dubai Financial Market at Dubai World Trade Centre. All photos: Chris Whiteoak / The National

Shares in Salik, Dubai's toll operator, surged as much as 21 per cent as the company made its debut.

The company started trading under the ticker symbol 'SALIK'.

Dubai's government sold more than 1.867 billion shares in the company, or 24.9 per cent.

Salik raised Dh3.735 billion from its initial public offering this month.

Salik's offering is part of Dubai's plans to list 10 state-owned companies to increase the size of its financial market to about Dh3 trillion.

Revenue-generating trips during the July-September period increased at a similar rate, reaching about 97 million. But they were 3 per cent lower quarter-on-quarter due to seasonality, Salik said.

In the first nine months of the year, total trips increased about 15 per cent on an annual basis to 395 million, driven by rapid recovery from the effects of the Covid-19 pandemic, as well as the positive growth resulting from Expo 2020 Dubai, the company said.

Revenue-generating trips during the period rose 16 per cent to 302 million, it said.

The number of vehicles registered with Salik increased 0.7 per cent year-on-year to 3.65 million at the end of the third quarter.

The number of electric vehicles with free-issue tags registered with Salik reached 1,866 at the end of the third quarter, up from 1,566 at the end of June and the September 2021 tally of 994.