Salik revenue soars to Dhs2.1b; approves H2 2023 dividends

The Board of Directors of Salik Company, Dubai’s exclusive toll gate operator, chaired by Mattar Al Tayer, Chairman of the Board, have approved the Company’s financial results for the year ended 31st December 2023.

Salik continued to deliver strong top-line performance in 2023, with 461.4 million revenue-generating trips and record total revenue of Dhs2.1 billion.

Toll usage revenue, which represents 87.5 per cent of total revenue, increased 11.7 percent year-on-year (YoY) to Dhs1,845 million, the strongest full year performance since Salik commenced operations in 2007, supported by continued strong growth in tourism and residency, with Dubai remaining an attractive destination both for visitors and individuals relocating to the city.

Revenue-generating trips grew strongly in the fourth quarter, up 11.1 per cent YoY to 123.2 million, with toll usage revenue reaching Dhs493 million in the fourth quarter, up 11.1 percent YoY and representing 87.5 per cent of total revenue.

Mattar Al Tayer said, “Salik has reported another strong year, with record top-line performance supported by continued strength in revenue generating trips. The achieved results for 2023 are a testament to our strategic vision and commitment to delivering long-term value to our shareholders, as well as to the positive macroeconomic environment in the UAE. GDP growth coupled with strong tourism inflow are evidence that the Government of Dubai’s initiatives to expand the economy, particularly focusing on population growth and maintaining the Emirate’s attractiveness to visitors, are bearing fruit.”

He added, “Meanwhile, Salik continues to emerge as a leading toll gate operator globally. Our updated corporate strategy will see the diversification of our revenue streams to supplement the expansion of our core tolling business, and we look forward to updating the market on our strategic progress in due course. In view of the strong performance in 2023, the Board is pleased to recommend a dividend of Dhs 550 million for the second half of the year.”

Ibrahim Sultan Al Haddad, Chief Executive Officer of Salik, commented, “Salik is continuing to make good progress on delivering its long-term objectives, in line with our ambition to become a global leader in mobility solutions. We are thriving in the tolling business and remain focused on strengthening our core business offering as we expand our footprint within Dubai. At the same time, we are committed to delivering sustainable growth, with our updated strategy purpose-built to widen the revenue generating opportunities that we pursue. In the fourth quarter of 2023, we were delighted to announce our partnership with Emaar to provide technology solutions for barrier-free parking at the world-famous Dubai Mall, and we look forward to pursuing similar initiatives in the year ahead.”

The total number of trips, including discounted trips, made through Salik’s eight toll gates grew by 10 per cent over the course of the year. Driven by Dubai’s continued attraction to tourists and business-as-usual commercial activities, the total number of trips grew 8.5 percent YoY in the fourth quarter. As a result, revenue-generating trips in 2023 reached new highs of 461.4 million, up 11.7 per cent YoY and comfortably above the pre-pandemic peak of 434.7 million recorded in 2019. The fourth quarter alone saw revenue-generating trips of 123.2 million, up 11.1 percent YoY, also higher than the previous quarterly record of 113.8 million recorded in the second quarter of 2023.

The number of vehicles registered with Salik in 2023 increased 8.3 percent YoY, reflecting the Government of Dubai’s ongoing success in expanding the economy and ensuring the Emirate remains a key destination for tourism and new residents. In addition, registered active accounts increased 16.0 percent YoY to approximately 2.4 million at the end of 2023. Tag activations reached c. 253,000 tags in the fourth quarter, an 18.1 percent increase from last year.

Salik generated EBITDA of Dhs 366 million in the fourth quarter of 2023, up 5.0 percent YoY, from Dhs 349 million in the prior year with EBITDA margin of 65.0 percent in the fourth quarter on a full year 2023 basis, EBITDA reached Dhs 1,390 million, with margins of 65.9 percent, in line with management expectations and the 66 percent-67 percent guided range.

In light of the strong set of results, the Board of Directors recommend distributing 100 percent of H2 2023 net profit as dividends to shareholders, amounting to Dhs550 million, equivalent to 7.3338 Fils per share. Accordingly, dividends for 2023 totalled Dhs1.098 billion, equivalent to 14.6395 Fils per share, noting that Dhs 548 million, equivalent to 7.3057 Fils per Share were distributed for H1 2023, following the Board of Directors’ decision on 10th August 2023.

The Company was established in its current form, as a public joint stock company in June 2022 pursuant to Law No. (12) of 2022. “Salik”, which means “seamless mobility” in Arabic, is Dubai’s exclusive toll gate operator and manages the Emirate of Dubai’s automatic toll gates utilising Radio-Frequency-Identification (RFID) and Automatic-Number-Plate-Recognition (ANPR) technologies. The Company currently operates 8 toll gates located at strategic junctures, especially on Sheikh Zayed Road, which is considered the main road in Dubai. In 2022, 539 million journeys were recorded through Salik’s toll gates, whether for residents commuting within the Emirate for their daily activities or for tourists visiting Dubai’s attractions. Under a 49-year concession agreement (ending in 2071), with the Roads and Transport Authority (RTA), Salik has the exclusive right to operate existing and any future toll gates in Dubai.