Parkin in 'cash-plus' deal with Majid Al Futtaim on malls' parking services
Dubai company also clocks sizable 48% growth in fines issued over first 9 months
Dubai: The Dubai parking space operator Parkin topped Dh300 million in first nine-month 2024 profit, totaling Dh303.49 million from Dh287.91 million a year ago. For the July to September period, the bottom-line came to Dh104.7 million from Dh99.84 million.
Nine-month revenues were Dh660.2 million, against Dh575.4 million.
Parkin, whose stock is on an absolute tear on DFM this year by gaining over 60%, will be aiming for another sizeable boost from early 2025 as its deal with Majid Al Futtaim to operate barrier-free parking services at three leading malls in Dubai. What this does is raise another revenue stream for Parkin. (The contracts are for Mall of the Emirates, City Centre Deira and Dity Centre Mirdif and represent a 5-year deal.)
There was a 48% increase in fines issued - from 282,800 in Q3-2023 to 418,100.
But the other legacy components making up Parkin's business model are doing just as fine.
The EBITDA advanced by 40%, with a margin of 61%, primarily due to strong top-line growth and operational leverage.
"Our strong third-quarter results demonstrate ongoing progress on key operational metrics which underpin the company’s revenue growth and profitability," said Ahmed Bahrozyan, Chairman of Parkin. "Parkin is well positioned to capture future market opportunities in line with our strategy. These opportunities are well supported by Dubai’s expanding population, increasing car ownership and continued investment in our world-class transport infrastructure."
In the July to September period alone, Parkin's top-line grew an impressive 25% to Dh239.2 million from Dh192.2 million. "These operational achievements (were) underpinned by an increase in public parking revenues, our core business segment where we have a dominant market position, higher revenues from developer parking, higher seasonal card sales and improved enforcement revenues," said Mohamed Al Ali, CEO at the Dubai company, which had its IPO earlier this year.
"The EBITDA advanced by 40%, with a margin of 61%, primarily due to strong top-line growth and operational leverage."
Structuring the Majid Al Futtaim deal
Parkin will operate on a 'cost plus' basis at the three Dubai malls owned by Majid Al Futtaim Group. "We decided on this because most malls offer 3-4 hours of free parking and with the charge after the fourth or fifth hour," said Khattab Abu Qaoud, CFO. "For us to avoid any demand- or revenue risk, it meant the 'cost plus' made sense.
We will look into the figures going forward and see whether there is room to change the arrangement into a revenue share process.
The three malls combined host more than 20 million cars annually.
Parkin officials said the technology that will provide the 'seamless customer experience at the malls' had been fine-tuned over the last 3 years. "We had to provide proof-of-concept on the hardware and then about our software systems, big data analysis to Majid Al Futtaim," said Al Ali.
Starting January 1, all those processes will go into action, adding to the prospects of it being deployed elsewhere too.
Deals with developers
Another future growth area will be to operate the parking areas at real estate developers' projects. Currently, this makes up under 10% of Parkin's revenues.