Dubai’s toll gate operator Salik’s 2023 net profit reached Dh1.098 billion in 2023, driven by an increase in toll usage fees, higher fines and new tag activations.
The company’s net profits dropped by 17.2 per cent from the previous year. However, it is worth noting that comparing profitability between 2022 and 2023 does not accurately reflect the company’s performance on a like-for-like basis, due to changes in its operating structure and cost profile. This was said in a statement on Monday after the Board of Directors’ meeting, chaired by Mattar Al Tayer, chairman of Salik.
The company said revenue continued to increase during the full year and fourth quarter of 2023, supported by the inflow of tourists and movement of individuals across Dubai. In total, 461.4 million revenue-generating trips were registered, recording a total revenue of Dh2.1 billion. As a result, toll usage fee revenues increased 11.7 per cent year-on-year to Dh1.845 billion for the full year. Toll usage fee revenues increased by 11.1 per cent to Dh493 million for the fourth quarter.
Fines performed strongly during both the full year and fourth quarter periods, with full-year 2023 revenue from fines up 7.5 per cent to Dh217 million. Revenue for fines in Q4 also increased, up 12.7 per cent to Dh54 million. The number of net violations (accepted minus dismissed violations) grew 9.2 per cent to 2.6 million.
Tag activation fees grew strongly on both an annual and a quarterly basis. Revenue from tag activation fees grew 18.7 per cent to Dh38 million in 2023, and Dh14 million in the fourth quarter, up 65 per cent.
The company recently announced the addition of two new gates and signed a deal with Emaar Malls to install its toll gate technology at Dubai Mall. These new deals will further improve the company’s profitability in the coming years.
Dh550-million dividend recommended
Salik’s Board of Directors recommended distributing 100 per cent of H2 2023 net profit as dividends to shareholders.
“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 Dh550 million for the second half of the year,” said Mattar Al Tayer.
Registered vehicles increased 9 per cent year-on-year to 4 million as growth in active accounts exceeds 15 per cent in 2023.