Salik profit down 4.1% despite record toll revenue

Salik

• Dubai toll operator recorded 113.6m trips
• Performance down due to changes in its operating structure
• Part of Salik was listed on Dubai stock exchange last September

Dubai toll operator Salik reported a 4.1 percent decrease in Q1 net profit, despite toll usage revenue hitting a record AED454 million ($124 million).

Salik’s quarterly toll revenue was the highest since the start of operations in 2007 – representing an eight percent annual increase – but net profit stood at AED275 million mainly due to an increase in costs.

Salik recorded 113.6 million trips, exceeding the previous peak level of 113.5 million trips in Q1 2019, aided by the lifting of Covid-19 restrictions, as well as growth in commercial and tourist activity.

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The toll operator was given a boost on the back of the UAE reporting its fastest growth in new business for 18 months in April, spurring a rise in non-oil business activity across the country.

Salik’s total revenue for the first quarter climbed to AED520 million ($141.6 million), compared with AED488 million recorded for the same period last year.

Revenue from fines and penalties increased 2.1 percent year-on-year to AED55.3 million.

The number of vehicles registered with Salik increased seven percent year-on-year to 3.9 million.

Salik noted that 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 operates as a separate legal entity from the Roads & Transport Authority (RTA) through a 49-year concession agreement.

Mattar Al Tayer, chairman of Salik, said the company was committed to “advancing capital market growth and supporting the emirate’s wider economic development plans”.

Salik listed on the Dubai stock exchange in September last year, raising just over $1 billion from the sale of a 24.9 percent stake, with the government retaining a 75.1 percent stake.

The IPO was more than 49 times oversubscribed across all tranches.

According to the EY Mena IPO Eye Q1 2023 report, there were 10 stock market listings with combined proceeds of $3.4 billion, with six out of the 10 Mena IPOs recording a positive return at the end of the quarter compared to their listing price. 

This was a third fewer and down 14 percent in value compared to Q1 2022.

However, the region still provided 16 percent of total global proceeds of flotations in Q1.