Dubai toll operator Salik reported a yearly increase of more than 5 per cent in its third-quarter profit following record growth in revenue.
Net profit for the period jumped to Dh255 million ($69.5 million) from about Dh240 million for the same period last year, the company said in a regulatory filing to the Dubai Financial Market, where its shares are traded.
While depreciation and amortisation expenses for the period saw a small yearly increase to about Dh21 million, compared to about Dh20 million in the third quarter of last year, finance costs more than doubled to about Dh63 million from Dh29 million in the same quarter last year.
The company incurred a concession fee expense of nearly Dh111 million for the period.
Revenue grew more than 14 per cent to about Dh509 million as its revenue-generating trips grew about 15 per cent to reach Dh111 million, the highest third-quarter performance since Salik commenced operations in 2007, supported by continued strong growth in tourism and residency.
Salik was established in its current form as a public joint stock company in June 2022. Toll usage revenue represents about 87 per cent of its revenue.
“We are very encouraged by year-to-date performance as well as by supportive macroeconomic indicators for the remainder of the year,” said Ibrahim Al Haddad, chief executive of Salik.
“Strong and sustained momentum in the third quarter is also evidence that the government of Dubai’s focus on expanding the economy, particularly focusing on population growth and maintaining the Emirate’s attractiveness to tourists.”
During the first nine months of 2023, Salik’s net profits declined about 23 per cent yearly to about Dh803 million.
Revenue for the nine-month period jumped about 11 per cent as revenue-generating trips increased 12 per cent yearly to Dh338.2 million.
“Salik continues to emerge as a leading toll gate operator globally, supported by a highly efficient business model and a buoyant local macroeconomic environment,” said Mattar Al Tayer, chairman of Salik.
The number of vehicles registered with Salik increased about 9 per cent yearly as of September 30, 2023 and registered active accounts increased 13 per cent to approximately 2.4 million, the company said.
Comparing Salik's profitability between the nine-month period of 2022 and 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, it said.
Since July 2022, Salik has been operating as a separate legal entity from the Roads and Transports Authority through a 49-year concession agreement.
“As a result, Salik incurs new costs, such as concession fees, rent, amortisation, and transitional service expenses, as well as finance costs,” the company said.
In September this year, Salik completed one year as a listed entity.
Salik raised Dh3.73 billion in September 2022 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 a 75.1 per cent stake after the sale of the stake.
“The company’s achievements in the last twelve months reflect Dubai's resilience in a highly volatile global economy and a surge in the volume of traffic on the city’s toll roads,” it said.
