Salik to Open Two New Toll Gates in Dubai by November

Salik, Dubai’s exclusive toll gate operator and which currently operates eight automatic toll gates utilising radio frequency, on Monday said it will open two more toll gates – the Business Bay Crossing and Al Safa South gates – by November this year.

The company, which has recently announced its ambition to become a global leader in providing sustainable and smart mobility solutions by building on its expertise in the tolling business and on its strong ESG credentials, is focusing on two additional pillars to spur growth and resilience by diversifying the business.

The planned opening of the two new toll gates marks continued progress for Salik’s core tolling business, the company said in a disclosure to Dubai Financial Market (DFM), where its shares are traded, this morning.

This is further supplemented by the company’s agreement with Emaar Malls to provide a seamless parking payment collections solution at the world-famous Dubai Mall, as announced at the end of 2023, in line with Salik’s ambitions to build out its ancillary revenue streams.

Salik continues to focus on building a portfolio of vehicle-centred mobility services, including enriching offerings that are payable directly through Salik accounts, alongside other ancillary revenue streams, including advertising and the potential monetisation of data with mobility players, the company said.

It also plans to establish itself as a future-proof company by ensuring an efficient treasury management and funding system is in place, whilst developing internal capabilities to support the evolving business model and enhance overall resilience and operational excellence.

Business Outlook

The company said that the full year 2024 revenue-generating trips are expected to increase in the range of 4-6% y-o-y, a continuation of the strong growth momentum seen in 2023, with a robust EBITDA margin in the range of 65-66%.

Although it is still early in the financial year, Salik’s management are mindful of the continued closure of the Floating Bridge, which has increased traffic through the Al Maktoum Bridge toll gate and are assessing the potential positive impact on full year financials should the bridge remain closed for longer than originally expected.

It may be recalled that on 3 April 2024, Salik announced the reduction of its annual concession fees that are due to the Roads and Transport Authority (RTA). Wherein the Concession Fees were adjusted after the annual inflation rate for Dubai was announced by the Dubai Statistics Centre, amounting to 3.33% for full year 2023.

The company continued to deliver strong top-line performance with 122.8 million revenue-generating trips and total revenue of $153.01 million, increasing by 8.1% y-o-y which is the highest Q1 revenue-generating trips since its inception.

Toll usage revenue, which represents 87.4% of total revenue, also increased 8.1% y-o-y to $133.68 million, supported by continued strong growth in tourism and residency, with Dubai remaining an attractive destination both for visitors and new residents relocating to the city.

Announcing the financial results for the first quarter of 2024, Salik’s chairman Mattar Al Tayer said that the company has delivered another strong quarter at the beginning of 2024, a continuation of the momentum from record top-line performance in 2023.

He added: “The results 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 Dubai’s initiatives to expand the economy, particularly focusing on population growth and maintaining the Emirate’s attractiveness to visitors, are bearing fruit.”

Salik CEO Ibrahim Sultan Al Haddad said that the results supported their ambition to become a global leader in mobility solutions and Salik continued to thrive in its core tolling business and remain focused on diversifying its portfolio through the expansion of ancillary revenue streams.

“The first quarter marked a period of strategic progress, having announced an expansion of our toll gate network. This follows the diversification into parking management solutions through our partnership with Emaar Malls, as announced at the end of 2023. Both strategic milestones are exciting developments for our business, placing Salik in a position of strength going forward,” he added.