Parkin profit up 27% as fines and seasonal cards surge

Dubai's official parking platform Parkin reported a record income, EBITDA and net profit for the third quarter ending September 30. It was developer parking, seasonal cards and enforcement that drove the gains. The company also noted a fall in public parking revenue.

On a quarter on quarter basis, the company reported a total income of Dh415.2 million, up 21 per cent. Net profits are up 27 per cent at Dh199.2 million. The company also showed  an EBITDA of Dh255 million, up 28 per cent, at a 61 per cent margin. They also grew the number of parking spaces to 272.5k, up 24 per cent

On a 9-month basis, net profit rose 25 per cent to Dh550.6 million, while income climbed 24 per cent to Dh1.16 billion.

Eng. Mohamed Abdulla Al Ali, CEO of Parkin, credits the company’s mix of businesses. “The double-digit growth demonstrates the strength of our diversified business,” he said. He added that developer parking, seasonal cards and other streams more than offset the “softer public parking revenues”.

Developer portfolio nearly triples

Developer spaces jumped to 63.0k from 23.2k. New contracts signed over the past year explain the rise. Revenue grew 69 per cent to Dh39.8 million. Transactions rose 79 per cent to 7 million. Growth however, slowed in this quarter itself. Parkin added about 4.3k spaces but lost about 2.8k after a certain developer contract ended in August. The net gain was 1.5k.

Enforcement expands

Enforcement revenue or those earned through penalties or fines rose 32 per cent to Dh136.4 million. Notices increased 34 per cent to 916k, from 682k. Developer sites accounted for 259k of them, up from 121k.

Smart inspection cars scanned 26.5 million plates, up 72 per cent. The fleet grew to 37 vehicles from 27. The fine collection rate reached 87 per cent, compared with 86 per cent a year earlier and 75 per cent in the second quarter.

Developer and enforcement revenue carry no concession fees. Together they made up 42 per cent of total revenue, up from 37 per cent. That shift lifted the EBITDA margin to 61 per cent from 58 per cent.

Public parking slip

Public parking revenue fell 5 per cent to Dh127.8 million. The year-earlier those revenues were at Dh135.0 million. Transactions dropped 4 per cent to 28.8 million.Utilisation slid to 19.1 per cent from 21.3 per cent. Zone D (the off-street parking lot zone located in non-commercial or residential areas) took the biggest hit, falling to 17.3 per cent from 23.6 per cent. Revenue per public space declined 12 per cent to Dh624, from Dh706.

Parkin points to two causes. Seasonal cards still sell at pre-variable tariff prices, which pulls demand from hourly parking. Newly added spaces also need time to ramp up. Cardholders do not count in the utilisation rate.

Seasonal cards surge

Seasonal card sales reached a record 110.6k, up 37 per cent. One-month cards led with 91.8k sales, up 44 per cent. September set a monthly record at 37.6k. Seasonal card and permit revenue rose 40 per cent to Dh83.8 million.

Cash conversion dropped to 89 per cent from 99 per cent. Capital expenditure rose to Dh28.1 million from Dh2.1 million. Free cash flow to equity stood at Dh421.5 million, down from Dh433.4 million.

Parkin says enforcement’s longer collection cycle and telecom receivables delayed inflows.

Guidance changes

Parkin raised guidance for two segments: Enforcement revenue has been increased to Dh460 million to Dh480 million, up from Dh420 million to Dh460 million. It is also looking to get additional revenue from seasonal cards and permits: Dh300 million to Dh320 million ($81.7 million to $87.1 million), up from Dh280 million to Dh300 million ($76.2 million to $81.7 million)

Public parking revenue should land near the midpoint of the Dh510 million to Dh550 million range. Developer revenue guidance holds at Dh130 million to Dh150 million. Capital expenditure stays at Dh45 million to Dh55 million.

Parkin delivered 2.7k public spaces in Q3. It expects 1,000 to 2,000 more in Q4. Full second-half guidance is raised from 3.5k to 5k