Salik Achieves Highest Quarterly Toll Usage Revenue Since Commencement of
Operations with AED 275 million Net Profit in Q1 2023
•
Salik reports the highest quarterly toll usage revenue in Q1 2023, since start of operations; toll
usage revenue rose c. 8% YoY, reaching a record AED 454 million and contributing 87% to total
revenue
•
Revenue-generating trips of 113.6 million exceed pre-pandemic peak level, thanks to a complete
reversion to business-as-usual economic and tourist activity and mobility
•
Active accounts and vehicle registrations increase c. 4% and c. 7% YoY, respectively, reaching
approximately 2.1 million and 3.9 million at the end of the first quarter
•
Q1 2023 EBITDA and net profit margins of 66.8% and 52.9%, respectively, continue to reflect
Salik’s streamlined business and robust concession framework
•
Salik achieves robust net profit and free cash flow of AED 275 million and AED 325 million,
respectively in Q1 2023
Dubai, UAE – 12 May 2023: During its meeting presided by His Excellency Mattar Al Tayer, Chairman
of the Board, the Board of Directors of Salik Company PJSC (“Salik” or the “Company”), Dubai’s
exclusive toll gate operator, approved the Company’s condensed interim financial results for the first
quarter of 2023 (three-month period ended March 31, 2023), in which Salik recorded the highest level
of quarterly revenue-generating trips and toll usage revenue since the start of operations in 2007, at
113.6 million trips and c. AED 454 million, respectively. Toll usage revenue, which contributed 87%
to total revenue, increased 7.9% YoY on the back of a return to business-as-usual in Dubai following
the complete lifting of Covid-19 restrictions, as well as solid organic growth in commercial and tourist
activity. Salik achieved net profit of c. AED 275 million during the quarter, with a net profit margin of
52.9% .
His Excellency Mattar Al Tayer, Chairman of the Board of Directors of Salik, expressed
satisfaction with the Company's strong results during the first quarter of 2023. He emphasized
“Salik's position as Dubai's exclusive road toll operator and its contribution to the transportation
sector's expansion” expressing confidence in the Company's ability to provide long-term value to
shareholders.
His Excellency also recognized Dubai's economic resilience and ongoing efforts to attract a diverse
population. He said: “As a key player in Dubai's economy, Salik intends to persist in collaborating with
stakeholders to establish fresh opportunities for the Emirate of Dubai’s residents and visitors,
confirming that the Company’s unwavering commitment to advancing capital market growth and
supporting the Emirate's wider economic development plans was exemplified by Salik's pivotal role
in Dubai's initial public offering program through its momentous listing last September.”
Ibrahim Sultan Al Haddad, Chief Executive Officer of Salik, commented:
"We are delighted to announce Salik's financial and operational performance for the first quarter of
2023, following our successful listing on the Dubai Financial Market last September. The results we
achieved demonstrated our ability to attain the desired level of success, driven by Dubai's economic
resilience and record usage of our toll roads. In addition, our robust business model contributed
significantly to the Company’s success. Salik achieved remarkable profitability in the first quarter of
2023, with an impressive EBITDA margin of 66.8%, reflecting our commitment to deliver exceptional
results for Salik and unlock greater value for our shareholders. We are continuing to invest in ourhuman capital, recognizing the importance of a diverse and inclusive workforce that reflects the
communities we serve. We will continue to prioritize employee development and advancement as we
strive to achieve our objectives and make a positive impact on the economy and society."
Mobility Highlights
Highest quarterly revenue-generating trips since start of operations; Salik posts 7.9% YoY
growth in revenue-generating trips to 113.6 million in Q1 2023
The total number of trips, including discounted trips, made through Salik’s eight toll gates in the first
quarter of 2023 witnessed growth upon comparison against both the first quarter of 2022 and the
fourth quarter of 2022 by 7.6% and 1.8% respectively. This was driven by Dubai resuming business-
as-usual commercial and tourist activities, marking the ongoing recovery from the pandemic. As a
result, revenue-generating trips increased 7.9% to 113.6 million trips in the first quarter of 2023
compared to 105.3 million trips in the first quarter of 2022, exceeding the previous peak level of 113.5
million trips recorded in the first quarter of 2019.
Million Q1 2023 Q1 2022 % Δ YoY
Total trips(1) 146.9 136.5 7.6%
Discounted trips(2) 31.7 29.8 6.3%
as a % of total trips 21.5% 21.8% -0.3%
Net toll traffic(3) 115.2 106.8 7.9%
as a % of total trips 78.5% 78.2% 0.3%
Revenue-generating trips(4) 113.6 105.3 7.9%
as a % of net toll traffic 98.5% 98.6% -0.1%
As a % of total trips 0.67% 0.72% -0.1%
(1) Total vehicle trips through Salik toll gates
(2) Discounted trips include taxis without passengers, Al Mamzar and Al Maktoum gates free time and discounts, vehicles exempted by law, and multiple violations
and other. Multiple violations refer to drivers that repeatedly drive through the toll gates without paying in 24 hours. In this case, the fine is paid only once
(3) Net toll traffic is total trips minus discounted trips
(4) Revenue-generating trips is net toll traffic minus fines & penalties and unreconciled trips. Revenue-generating trips is the driver for Salik's toll usage fees
revenue, which accounts for the majority of Salik's revenue
Registered vehicles increase 6.9% YoY to c. 3.9 million
The number of vehicles registered with Salik increased 6.9% YoY and 5.5% QoQ to 3.9 million as of
March 31, 2023, reflecting the Emirate of Dubai’s ongoing successful efforts to attract tourists and
talent. Further, registered active accounts increased 4.2% YoY to 2.1 million by March 31, 2023. Tag
activations reached c. 215,000 tags in the first quarter of 2023, a 12% increase from last year
whereas deactivations decreased c. 5% YoY to c. 138,000 tags.Financial Highlights
Note on the financial statements:
Comparing Salik's profitability between Q1 2022 and Q1 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. From July 2022 onwards, Salik operates as a separate legal entity from the RTA
through a 49-year concession agreement. This has resulted in new costs, such as concession
fees, rent, amortization, and transitional service expenses, as well as finance costs, that did not
exist prior to July 2022.
Rise in toll road usage drives c. 7% YoY increase in Salik’s revenue to c. AED 520 mn in Q1 2023
During the first quarter of 2023, Salik’s revenue increased 6.5% YoY to AED 520 million, primarily
driven by the following:
•
Toll usage fees: strong growth in revenue-generating trips drove a 7.9% YoY growth in revenue
from toll usage fees, reaching a record AED 454 million, the highest quarterly level recorded since
the start of operations. This was driven by the resumption of and growth in commercial and
tourist activities in Dubai amidst an ongoing recovery after the lifting of Covid-19 restrictions.
Toll usage fees contributed c. 87% to total revenue during the quarter.
•
Fines and penalties: revenue from fines and penalties increased 2.1% YoY to AED 55.3 million,
from AED 54.2 million a year earlier, broadly in line with growth in the number of violations, net of
violation dismissals (c. 631,000 in Q1 2023 compared to c. 620,000 a year earlier). The number
of net violations remained mostly unchanged as a fraction of net toll traffic, and revenue from
fines and penalties contributed c. 11% to total revenue.
•
Tag activation fees: despite a 12% YoY increase in tag activations, the Company’s revenue from
tag activation fees decreased c. 25% YoY to AED 8.6 million, as revenue is recognized over the
estimated average tag life of five years, and recognized revenue is affected by tag sales during
the current financial period as well as previous periods which were impacted by the pandemic.
Tag activation fees contributed c. 2% to total revenue.
Salik’s revenue during the first quarter of 2023 increased 3.6% compared to the fourth quarter of
2022, mostly driven by a 2.4% increase in revenue from toll usage fees, as well as a 15% increase in
revenue from fines and penalties. The sequential growth was mostly driven by positive seasonality
effects as well as organic growth in the number of trips.
Strong profitability in Q1 2023 continues to highlight the strong business model
Salik achieved an EBITDA of c. AED 348 million in the first quarter of 2023, reflecting a solid margin
of 66.8%. Compared to the fourth quarter of 2022, EBITDA came in flat despite the sequential growth
in revenue during the first quarter, due mainly to absence of a one-time income from write-back of a
liability no longer payable amounting to AED 8 million that was recorded in the comparable period.
Salik’s net profit reached c. AED 275 million during the quarter, a decrease of 4.1% from the fourth
quarter of 2022 mainly due to an increase in finance costs and the absence of the liability write-back.
Salik’s net profit margin reached an impressive 52.9% during the quarter.Summary of statement of profit or loss
AED million(1) Q1 2023 Q1 2022 % Δ YoY
Revenue 520 488 6.5%
Toll usage fees 454 421 7.9%
Fines and penalties 55 54 2.1%
Tag activation fees 8.6 11.4 -24.5%
Other revenue 1.9 1.5 31.1%
EBITDA(2) 348 405 -
EBITDA margin 66.8% 82.9% -
Finance costs, net (52) - -
Profit for the period 275 403 -
No. of shares outstanding (million) 7,500 7,500 -
Earnings per share (AED) 0.037 0.054 -
(1) Comparing Salik's profitability between Q1 2022 and Q1 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 since the start of the concession agreement. For further details, please refer to the notes to the Company’s financial
statements.
(2) EBITDA is profit for the period, excluding the impact of finance cost, finance income, and depreciation, and amortization expenses
Sound leverage with net debt-to-EBITDA at 2.1x highlights balance sheet strength
At the end of the quarter, the Company's net debt balance was approximately AED 2.9 billion, which
is equal to a healthy EBITDA of 2.1x on an annualized basis for the first quarter of 2023. This ratio is
significantly lower than the Company's debt covenant of 5.0x. To cover the upfront concession
payment and for general corporate use, Salik secured an AED 4.2 billion credit facility agreement,
which includes a revolving facility of AED 200 million, with Emirates NBD Bank on June 30, 2022.
The Company recorded a net working capital balance of AED -123 million as of March 31, 2023,
decreasing from AED -147 million as of December 31, 2022. The decrease in the balance was mainly
due to an increase in due from related parties from AED 144 million to AED 176 million, purely a timing
matter in relation to collections from Dubai Taxi Corporation and Dubai E-Government.
Contract liabilities, which are balances paid in advance by customers relating to recharges and tag
activation fees, increased 1.9% QoQ to AED 344 million as of March 31, 2023, reflecting higher
recharges than actual usage during the period.
Summary of financial position
AED million 31 Mar 2023 31 Dec 2022 % Δ YtD
Total assets 5,379 5,303 1.4%
Total liabilities 4,500 4,699 -4.2%
Total equity 879 604 45.6%
Borrowings 3,986 3,986 0.0%
Cash and cash equivalent 1,097 823 33.3%
Net debt 2,890 3,163 -8.6%
Contract liabilities (1) 344 338 1.9%
Net working capital (2) (123) (147) -16.3%
Inventories 2 12 -79.8%
Trade and other receivables (3) 165 364 -54.8%
Due from related parties 176 144 22.1%
Due to a related party (4) (117) (313) -62.6%AED million 31 Mar 2023 31 Dec 2022 % Δ YtD
Trade and other payables (50) (60) -16.7%
Contract liabilities, current portion (299) (294) 1.7%
(1) Contract liabilities is the sum of current and non-current balances paid in advance by customers relating to recharges and too-ups and tag activation fees
(2) Net working capital is the balance of inventories plus trade and other receivables (unadjusted for impairments) plus dues from related parties minus trade
and other payables, minus due to a related party minus current portion of contract liabilities
(3) Trade and other receivables on December 31, 2022 included a one-time VAT receivable of AED 200 million, reflecting a 5% on the AED 4.0 upfront
concession fee that was settled in Q1 2023
(4) Due to a related party on December 31, 2022 included a one-time payable of AED 200 million, reflecting a 5% VAT payable on the AED 4.0 billion upfront
concession fee, settled in Q1 2023
Strong free cash flow of AED 325 million with a margin of 62.5% in Q1 2023
Salik’s cash flow from operating activities and free cash flow each reached AED 325 million in the first
quarter of 2023, thanks to the strong traffic performance. Salik did not incur any capital expenditures
during the reported period and the Company’s free cash flow margin reached 62.5%.
Summary of cash flow
% Δ
AED million Q1 2023 Q1 2022
YoY
Operating cash flow before changes in working capital 355 415 -14.4%
Changes in working capital (30) (3) 900%
Net cash flow from operating activities 325 412 -21%
Net cash used in investing activities 4 - -
Net cash used in financing activities (55) (411) -86.6%
Free cash flow(1) 325 411 -21%
Free cash flow margin(2) 62.5% 84.3% -21.8%
(1) Free cash flow is net cash flows from operating activities less purchases of property and equipment plus proceeds from the sale of property and equipment
(2) Free cash flow margin is free cash flow divided by revenue
Business Highlights
Salik signs lease to move to a new head office
Salik has signed a new lease agreement to relocate to a new headquarters during the fourth quarter
of 2023, marking an important milestone in the evolution of Salik as it transitioned from a unit under
the RTA to a standalone company. Salik’s current office space has helped it grow over the years and
moving to a new head office offers even more benefits, including more space for staff, improved
infrastructure, and the capacity to draw top talent. A new office space provides new and modern
design features and supports the mission and objectives of the company by fostering productivity
and efficiency, which in turn will help the Company better serve customers and boost shareholder
value.
As of January 2023, Salik has taken on several functions fully independent of the RTA, including
finance, payroll, contracting and procurement. As of May 2023, Salik fully undertakes the functions
of human resources in-house, after previously having these services provided by the RTA via a
transitional service agreement to support Salik through its journey to becoming a standalone
company.
Salik is making further progress in its efforts to promote sustainability
Salik remained committed to environmental sustainability by encouraging the use of electric vehicles
and providing free Salik tags to their owners. As of March 31, 2023, the number of registered vehicleswith these tags doubled from a year earlier, and increased by 19% compared to the previous quarter,
reaching 2,869 vehicles.
Salik continues to prioritize investing in its human resources and upholds its commitment to diversity
and inclusivity. Between July 1, 2022, when its concession agreement with the RTA commenced, and
March 31, 2023, Salik expanded its full-time workforce from 12 to 33 personnel and saw a rise in the
number of nationalities represented from six to nine.
Furthermore, Salik continued to emphasize gender diversity, with females comprising 27% of the
total workforce as of March 31, 2023. The company also achieved advancements in Emiratization,
attaining a level of 42% by the end of the quarter.
Salik continued to offer tariff exemptions to vehicles used by charities, schools, people of
determination, ambulances, and other public services. The number of free-of-charge trips made by
exempted vehicles through Salik’s eight toll gates increased 2.8% YoY to c. 2 million in the first
quarter of 2023, at a rate of over 22,700 trips per day, on average. The increase was driven by an
increase in the number of registered exempted vehicles by 9% YoY to reach 48,705 vehicles by the
end of the quarter.
Business Outlook
Salik's performance during the first quarter of 2023 showed a persistent upward trend in the
number of trips made through its eight toll gates. As a result, Salik reiterates its guidance of a 5-6%
YoY increase in revenue-generating trips throughout 2023 and anticipates achieving an EBITDA
margin towards the upper end of the previously guided 63-64% range. The Company expects to
incur one-time costs in 2023 related to building fit-out and IT, professional fees, among other costs.
—ENDS —
About Salik Company PJSC
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 any existing
and future toll gates in Dubai.
Investor Relations Media Enquiries
Mohamed Zein Faisal Tawakul
Head of Investor Relations Marketing & Corporate Communications
E: Mohamed.Zeinelabedin@salik.ae Manager
E: Faisal.Tawakul@salik.aeDisclaimer
No statement in this document is intended to be nor may be construed as a profit forecast. Any statements
made in this document which could be classed a “forward-looking” are based upon various assumptions,
including, management’s examination of historical operating trends, data contained in the Company’s records
and other data available from third parties. Although the Company believes that these assumptions were
reasonable when made, these assumptions are inherently subject to significant risks, uncertainties and
contingencies. Forward-looking statements are not guarantees of future performance. Risks, uncertainties,
contingencies could cause the actual results of operations, financial condition and liquidity of the Company to
differ materially from those results expressed or implied in the document by such forward-looking statements.
No representation or warranty is made that any of these forward-looking statements or forecasts will come to
pass or that any forecast result will be achieved. No reliance should be placed on any forward-looking statement.

Sentiment: positive