Salik's Q3 2024: Strong Growth Amid Economic Tailwinds
Salik Company PJSC showcases robust financial performance, driven by increased revenue-generating trips and strategic expansions.
Summary
Salik Company PJSC reports significant growth in profit and revenue, driven by increased toll usage and strategic expansions. The company remains optimistic about future growth.
Salik Company PJSC, Dubai's exclusive toll gate operator, has demonstrated remarkable financial performance in the first nine months of 2024. The company reported a 12.5% increase in profit before tax, reaching AED 903.3 million, and a 6.2% rise in revenue, totaling AED 1,640.9 million. This impressive growth is attributed to a favorable macroeconomic environment and a boost in tourism, which have collectively supported Salik's top-line performance.
The third quarter of 2024 marked a milestone for Salik, with revenue-generating trips reaching a record 117.1 million, a 5.7% increase year-on-year. This surge in traffic has been pivotal in driving the company's revenue from toll usage, which constitutes a significant 86.7% of total revenue. The third quarter alone saw toll revenue increase by 5.7% year-on-year to AED 468.4 million.
Salik's strategic initiatives, such as the partnership with Emaar to provide parking solutions at Dubai Mall, have begun to diversify its revenue streams. The upcoming launch of the Business Bay Crossing and Al Safa South gates on November 24, 2024, is expected to further enhance Salik's operational capacity and revenue potential. These expansions align with the Roads and Transport Authority's strategic plan to improve traffic flow and bolster Dubai's global standing.
Despite the introduction of a new 9% UAE corporate tax, Salik has maintained a robust net profit after tax of AED 822.0 million for the nine-month period, up 2.4% year-on-year. This resilience underscores the company's solid business model and its ability to adapt to fiscal changes.
Looking ahead, Salik's management remains optimistic about continued growth. The company has reiterated its guidance for FY24, anticipating a 7-8% increase in revenue-generating trips, with a further 24-25% growth expected in FY25, bolstered by the new toll gates. As Dubai's economy continues to thrive, Salik is well-positioned to capitalize on these positive trends.
For investors, Salik presents a compelling case for a buy. The company's strategic expansions, strong financial performance, and positive outlook make it a promising investment opportunity in the UAE's dynamic market.
Source
Summary
Salik Company PJSC, Dubai’s exclusive toll gate operator, reported a 12.5% increase in profit before tax for the first nine months of 2024, reaching AED 903.3 million. The company’s revenue for this period was AED 1,640.9 million, a 6.2% year-on-year increase, supported by a positive macroeconomic environment and tourism trends. Revenue-generating trips totaled 355.6 million, up 5.1% year-on-year. Net profit after tax rose 2.4% year-on-year to AED 822.0 million, despite the new 9% UAE corporate tax. Salik expects revenue-generating trips to increase by 24-25% in 2025, following the launch of two new toll gates and a parking partnership with Emaar at Dubai Mall. The company maintains its guidance for a 7-8% revenue growth in 2024, anticipating a strong fourth quarter.
