Dubai-listed road toll operator Salik has increased its revenue growth forecast for 2024 to 7-8 percent following the opening of two new toll gates worth AED 2.734 billion ($646 million).
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Revised Revenue Forecast and EBITDA Margins
Salik forecasted revenue growth in 2024 would come in at 4-6%. It has now upgraded that guidance to 7-8%. The firm also increased its EBITDA margin from a prior estimate of 65-66% to 67-68%. These amendments incorporate Salik’s expectations of earnings increases due to the recently opened two new toll gates.
New Toll Gates to Improve Traffic Conditions
The two new toll gates, Business Bay and Al Safa South, will become operational at the end of November 2024. These conform to Dubai’s strategic plan to streamline the flow of traffic in order to minimise congestion, according to the Roads and Transport Authority, RTA. These two new toll gates will join the others to increase the number of Salik gates operating within Dubai to a total of 10.
The Business Bay gate, which will be the first-ever Salik gate on Al Khail Road, rather than on main arterial roads crossing through Dubai, is priced at AED 2.285 billion. At the Business Bay crossing, it should help ease up one of Dubai’s most congested areas.
The AED 469 million Al Safa South gate will be located on Sheikh Zayed Road between Al Meydan Street and Umm Al Sheif Street, another vital area in Dubai for regulated traffic flow.
Exclusive Rights Until 2071
Under its concession agreement with the RTA, Salik has exclusive rights for the construction and operation of toll gates across Dubai until June 2071. This fact certainly seals Salik into its strategic position with regards to road traffic management within the city.
Payment Agreement with RTA
Salik chief executive Ibrahim Sultan Al Haddad said that the company has agreed to the repayments of the two new gates with RTA. The firm would be paying AED 455.7 million annually in six years, starting at the end of November 2024. These will be in two equal instalments per year.
Salik is poised, with the two new operating toll gates, to boost revenue streams while continuing to solidify its important position in handling Dubai’s road traffic. This is consistent with an upward revision in the revenue growth projection and EBITDA margin forecast by the company, viewing with optimism the role that these new gates will play in helping mitigate congestion in vital parts of the city. As Salik continues with its expansion process, the future of road management in Dubai is bound to be molded with the help of the company’s partnership with RTA.
