New toll gates in Dubai: Salik shares gain over 35% in 3 months, hit all-time high

Investors have found the company’s shares very attractive due to its low capital-intensive business nature

Waheed Abbas

Published: Tue 23 Jan 2024, 11:47 AM

Last updated: Tue 23 Jan 2024, 11:40 PM

Salik Company shares have been steadily rising over the past few months, boosted by the toll gate operator’s expansion and announcement of the introduction of new toll gates.

The company’s shares hit an all-time high on January 19 following the announcement of 2 new toll gates, reaching Dh3.72 per share, bringing cheers to the shareholders. Its shares have jumped by nearly Dh1 per share, or over 35 per cent, in the past three months alone.

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It gained over 11 per cent or Dh3.8 a share on January 19 when two new toll gates were announced by the company. But short-term investors opted for profit-taking on Tuesday morning, pushing shares down by 1.4 per cent in the early trade.

However, the shares are up by over 75 per cent since it listed shares on the Dubai Financial Market on September 29, 2022.

Investors have found the company’s shares very attractive due to its low capital-intensive business nature.

On January 19, Salik said the Roads and Transport Authority has assigned the company “to install two new toll gates to optimise traffic flow and reduce congestion on key routes within Dubai” at Business Bay Crossing on Al Khail Road, and Al Safa South on Sheikh Zayed Road between Al Meydan Street and Umm Al Sheif Street. This will take the total number of toll gates in Dubai to 10.

With the launch of the new gates, Salik expects to see an increase in annual revenue-generating trips.

Salik Company PJSC distributed cash dividends of Dh491.4 million, or 6.5521 fils per share, in April last year. For the year 2023 onwards, the company expects to pay 100 per cent of the net profit available for distribution as dividends. This could lift the demand for its shares.

In addition, the company revenues are also expected to get a boost from the deal it signed with the Emaar Malls to deploy barrier-free parking for visitors. Salik’s system is expected to be operational in the third quarter of 2024.

In the third quarter of 2023, Salik reported 110.8 million revenue-generating trips and a total revenue of Dh509 million. Toll usage revenue, which represents 87.1 per cent of total revenue, increased 14.6 per cent year-on-year, the highest third-quarter performance since Salik commenced operations in 2007, supported by continued strong growth in tourism and residency, with Dubai remaining an attractive destination both for visitors and people relocating to the city.

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