Parkin Company (PARKIN) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue rose 12% year-over-year to AED 205.5 million, with EBITDA up 42% to AED 134.0 million and margin expanding to 65%.

• Net profit increased 7% to AED 95.0 million, despite the introduction of a 9% corporate tax rate in January.

• Operational expansion included a 3% increase in paid parking spaces and a 39% rise in seasonal cards issued.

• Public parking utilization improved by nearly 2 percentage points to 26%, with c.2,900 new spaces added.

• Incorporated as a standalone entity on 29 December 2023, with assets and liabilities transferred from RTA on 1 January 2024.

Financial highlights

• Q2 2024 revenue reached AED 205.5m, up 12% year-over-year; H1 2024 revenue was AED 421.0m, up 10%.

• EBITDA rose to AED 134.0m in Q2, a 42% increase, with a margin of 65%.

• Net profit grew 7% to AED 95.0m in Q2; H1 2024 net profit was AED 199m.

• Free cash flow to equity (FCFE) achieved 100% cash conversion, totaling AED 135.6m in Q2.

• Operating expenses decreased by 21% to AED 71.5m, mainly due to lower staff and corporate allocation costs.

Outlook and guidance

• Management expects business performance to align with FY 2024 guidance provided at IPO.

• Dividend policy targets semi-annual payments, with the first H1 2024 dividend expected in October.

• Employee benefits expense expected to rise in future quarters as hiring continues and salary realignment occurs.

• Transitional service expenses from RTA will continue for up to two years from January 2024.

• First annual tax return due by September 2025 under new UAE corporate tax law.