Salik Company (SALIK) H1 2024 earnings summary

Executive summary

• H1 2024 revenue rose 5.6% year-over-year to AED 1.1 billion, with Q2 revenue up 3.1% to AED 532.7 million compared to Q2 2023.

• Net profit before tax increased 9.2% year-over-year to AED 598.6 million for H1 2024; Q2 net profit before tax was AED 293.9 million, up 7.8% year-over-year.

• Net profit after tax for H1 2024 was AED 544.8 million, slightly down 0.6% year-over-year due to the new 9% UAE corporate tax.

• Board approved an interim dividend of AED 544.8 million (7.263 fils per share), representing 100% of H1 2024 net profit after tax.

• Revenue-generating trips reached 238.5 million in H1 2024, up 4.9% year-over-year; active registered accounts grew 14.6% to 2.5 million.

Financial highlights

• Toll usage fees accounted for 87.1% of total revenue, rising 4.9% year-over-year to AED 953.8 million in H1 2024.

• Fines and penalties revenue increased 7.4% year-over-year to AED 116.1 million in H1 2024; tag activation fees rose 30.6% to AED 19.7 million.

• EBITDA for H1 2024 was AED 738.4 million, up 6.5% year-over-year, with an EBITDA margin of 67.4%.

• Free cash flow in Q2 2024 was AED 333.8 million, with a margin of 62.7%.

• Net debt as of 30 June 2024 was AED 2,947.1 million, with a net debt/EBITDA ratio of 2.05x, well below the 5.0x covenant.

Outlook and guidance

• Financial guidance for 2024 will be updated later in the month to reflect the impact of two new toll gates, continued closure of the Floating Bridge, new ancillary revenues, and a 2.5% reduction in the RTA concession fee effective April 2024.