SALIC continues its growth momentum and explores opportunities for expansion locally and abroad Al Khaleej newspaper

Dialogue: Muhannad Dagher

Ibrahim Al-Haddad, CEO of SALIC, expects that the strong growth momentum achieved by the company in the first nine months of this year will continue during the remainder of 2023.

He said in an interview with “Al Khaleej” that he is optimistic about the company’s overall performance in the coming year, thanks to the strong and promising macroeconomic performance indicators, and we expect the company to continue achieving strong growth in 2024, indicating that the strong and sustainable momentum that the company has witnessed in the nine months The first of 2023 embodies the Dubai government’s focus on expanding the economy, population development, and maintaining the emirate’s position as a destination that attracts tourists. Al-Haddad expected that the natural growth in the number of flights generating revenues would range between 9% – 10% in 2023 compared to 2022, and that the profit margin before taking into account financing costs, taxes, depreciation and amortization would range between 66% – 67%. Al-Haddad revealed that there are opportunities for growth and expansion, both at home and abroad, but he said that it is too early to talk about anything specific, stressing that the company is in the stage of actively exploring the available options. The following is the text of the interview:

* Can you tell us about the overall performance of SALIC during the past months of this year?

– The company recorded a record level of performance this year, as the company’s revenues increased by 11.2% in the first nine months of this year compared to the same period last year to exceed 1.5 billion dirhams, resulting mainly from a 12.0% growth in fees for using the traffic toll system.

The company also recorded strong revenues in the third quarter amounting to 509 million dirhams, a growth rate of 14.2%, and achieved a strong net profit of 255 million dirhams, a growth rate of 5.3% compared to last year, and a free cash flow of 359 million dirhams in the third quarter of 2023.

The number of vehicles registered with Salik increased by 8.8% compared to the same period of the previous year as on September 30, 2023, which reflects the success of the Emirate of Dubai in its continuing efforts to develop its economy and maintain the emirate’s position as a major tourist and commercial destination. Furthermore, the number of registered active accounts increased by 13.0% compared to the previous year, reaching approximately 2.4 million accounts as of September 30, 2023.

Expanding the economy

*What are your expectations for performance in the coming year?

We expect the strong growth momentum achieved by the company in the first nine months of this year to continue during the remainder of 2023.

We are optimistic about the company’s overall performance in the coming year, thanks to strong and promising macroeconomic performance indicators, and we expect the company to continue to achieve strong growth in 2024. The strong and sustained momentum we have seen in the first nine months of 2023 exemplifies the Dubai government’s focus on expanding Economy, population development, and maintaining the emirate’s status as a destination that attracts tourists. SALIC relies on an effective business system, the emirate’s strategic position, and a thriving local economic environment to continue strengthening its position as a leading operator of toll gates worldwide.

We can confirm here our financial guidance for the fiscal year 2023, after the company achieved strong growth in revenues in the third quarter, supported by an increase in the number of flights through its eight gateways, in addition to the strong performance of the profit margin before financing costs, taxes, depreciation and amortization. SALIC expects that the natural growth in the number of revenue-generating trips will range between 9%-10% in 2023 compared to 2022, and that the profit margin before taking into account financing costs, taxes, depreciation and amortization will range between 66%-67%.

Tourism growth

* SALIC recorded good performance levels over the past quarters, with a remarkable increase in the use of the company’s portals. Do you think it is time to reconsider the fees you impose?

– Traffic toll fees are determined by the Roads and Transport Authority, so any decision to change the current fees falls on its responsibility. As I mentioned, we have had healthy growth over the past 12 to 18 months. We expect to record growth of between 9-10% this year compared to 2022, with this momentum continuing in the last quarter of this year.

Traffic in Dubai is growing, thanks to positive macroeconomic and demographic factors including the growth of tourism and the number of residents moving to the city. This supports Salik’s growth, with or without changes in toll fees.

New portals

* Do you have plans to create more gates in the emirate? Are there specific plans of this nature awaiting municipal approval?

The decision regarding the establishment of new toll gates is also subject to the Roads and Transport Authority. Of course, Salik will assume the management and operation of these gates if a decision is adopted in this regard.

Seize the best opportunities

* You mentioned during the initial public offering of the company’s shares that the portals would be equipped to display electronic marketing messages. When will this step be implemented?

– We are interested in this step, and are studying it seriously, as it comes within the framework of our endeavors to achieve financial benefit from our network of portals by using them to display data and advertisements. We are in active discussions in this regard with several potential partners.

International partnerships

* Some analysts believe that SALIC needs a large number of new gates to enhance growth, and that it must do so within the next 12 months. What do you think?

– There is no doubt that adding new portals will enhance growth, but our growth does not depend on their presence. First: The UAE’s macroeconomic strength contributes to strengthening our business model and supporting our strategy. The continuous and remarkable increase in the population of the Emirate of Dubai contributes to an increase in the number of vehicles on the roads, which means more vehicles passing through our gates. We expect this momentum to continue and be sustained in 2023 and 2024.

Second: The company has a number of other growth factors. As we mentioned previously, we always seek to seize opportunities in the field of advertising and dissemination of data, and we have made good progress at this level. In addition, we recently entered into a partnership with the Arabian Automobile Company, a subsidiary of Al Rostamani Group, allowing the sole distributor of many cars (including Nissan and Renault) in Dubai and Sharjah the opportunity to provide “Salik” cards to provide full services to customers with ease and convenience. We are still in discussions with various parties about potential partnerships, including international level partnerships, which we will disclose to the market in due course.

* Do you have other plans for expansion and growth?

There are opportunities for expansion and growth, both at home and abroad, but it is too early to talk about anything specific. We are still actively exploring the options available to us, and we will notify the market as soon as there are material developments that require disclosure.

Fake messages

*You have previously issued warnings regarding fake messages. Are there more clarifications on this matter?

– This is correct. We have known about the existence of fake posts and messages on social media, and we would like to reiterate to clients and investors alike that they are not real. Clients and investors should avoid interacting with such posts.