Dubai toll operator Salik has reported a 6.5 per cent jump in its first-quarter revenue after toll income hit a quarterly high amid a rebound in economic activity in the emirate.
Revenue for the three-month period to the end of March climbed to Dh520 million ($141.6 million), compared with Dh488 million recorded for the same period last year, the company said in a filing to the Dubai Financial Market, where its shares are traded.
Tolls income for the period rose by about 8 per cent to Dh454 million, the highest quarterly income on record since the start of operations.
Total vehicle trips through the toll gates increased by 7.6 per cent to 147 million amid growth in commercial and tourism activities in Dubai after the lifting of Covid-19 restrictions.
Fines and penalties revenue rose 2 per cent to Dh55 million.
“The results we achieved demonstrated our ability to attain the desired level of success, driven by Dubai's economic resilience and record usage of our toll roads,” Salik's chief executive Ibrahim Al Haddad said.
“In addition, our robust business model contributed significantly to the company’s success.”
Net profit for the quarter reached Dh275 million, compared to Dh403 million during the same period last year.
Salik said comparing its profitability on a like-for-like basis in the first quarter may not accurately reflect the company’s performance due to changes in its operating structure and cost profile.
Since July 2022, Salik has been operating as a separate legal entity from Dubai's Roads and Transport Authority through a 49-year concession agreement.
“This has resulted in new costs such as concession fees, rent, amortisation and transitional service expenses, as well as finance costs, that did not exist prior to July 2022,” it said.
Salik raised Dh3.73 billion in September from its initial public offering 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 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 Dh606 million.
Salik's revenue growth comes at a time when Dubai's economy continues to grow. It expanded by 4.6 per cent on an annual basis in the first nine months of 2022, according to data from the emirate's statistics centre.
Emirates NBD estimates Dubai's full-year growth for 2022 at 5 per cent and expects the economy to expand at 3.5 per cent in 2023.
Business activity in Dubai's non-oil private sector economy rose to an eight-month high in April, boosted by a sharp rise in sales and new orders as demand growth quickened.
Salik repeated its guidance of a 5 per cent to 6 per cent annual increase in revenue-generating trips throughout 2023.
The company expects to incur one-time costs in 2023 related to fit-out expenses, information technology and professional fees, it said on Friday.
