Salik Company, the renowned toll gate operator in Dubai, has seen its shares reach unprecedented heights, marking a significant milestone in its financial journey. On January 19, the company’s shares hit an all-time high of Dh3.72 per share, buoyed by the announcement of two new toll gates in the city. This surge in share value represents a remarkable gain of over 35% in just three months, a development that has brought considerable enthusiasm among shareholders.
The share value escalated by over 11% or Dh3.8 per share on the day the new toll gates were announced. However, a wave of profit-taking by short-term investors caused a slight dip of 1.4% in early trading the following Tuesday. Despite this minor fluctuation, Salik’s shares have impressively risen by over 75% since their listing on the Dubai Financial Market on September 29, 2022.
Investors have been particularly attracted to Salik Company’s shares due to the low capital-intensive nature of its business. The addition of new toll gates is expected to optimize traffic flow and reduce congestion on key routes within Dubai. The new installations at Business Bay Crossing on Al Khail Road and Al Safa South on Sheikh Zayed Road will bring the total number of toll gates in Dubai to 10, a move that is anticipated to increase annual revenue-generating trips for Salik.
In April last year, Salik Company PJSC distributed cash dividends of Dh491.4 million, equating to 6.5521 fils per share. The company has projected to pay out 100% of the net profit available for distribution as dividends from 2023 onwards, a strategy that could further boost demand for its shares.
Additionally, Salik’s revenues are expected to receive a lift from its agreement with Emaar Malls to implement barrier-free parking for visitors, with the system set to be operational in the third quarter of 2024.
Salik’s financial report for the third quarter of 2023 showed 110.8 million revenue-generating trips and a total revenue of Dh509 million. Toll usage revenue, which accounts for 87.1% of the total revenue, grew by 14.6% year-on-year. This growth marks the highest third-quarter performance since Salik commenced operations in 2007. The company attributes this success to the continued growth in tourism and residency, with Dubai maintaining its allure as a destination for both visitors and new residents.
The surge in Salik’s share value and its ongoing expansion reflect the robustness of Dubai’s economic landscape and the company’s pivotal role in the city’s infrastructure development. As Salik continues to evolve and adapt to the city’s growing needs, its financial prospects appear increasingly promising, offering a lucrative opportunity for investors and a testament to Dubai’s dynamic economic environment.
